ASSET IMPAIRMENT AND ESTIMATED LEASE TERMINATION AND OTHER CLOSING COSTS

12 Months Ended

Jan. 03, 2016

Asset Impairment And Estimated Lease Terminations And Other Closing Costs [Abstract]

Asset Impairment And Estimated Lease Terminations And Other Closing Costs Disclosure [Text Block]

(16) ASSET IMPAIRMENT AND ESTIMATED LEASE TERMINATION AND OTHER CLOSING COSTS

Restaurant sites that are operating, but have been previously impaired, are reported at the lower of their carrying amount or fair value less estimated costs to sell. The following is a summary of impairment costs for fiscal 2015, fiscal 2014, and fiscal 2013. These costs are included in asset impairment and estimated lease termination and other closing costs in the Consolidated Statements of Operations.

Richmond, VA Area Restaurant Closures

On December 29, 2014, the Company announced the closure of its three underperforming company-owned restaurants located in and around Richmond, Virginia. The associated impairment charges primarily related to the write-off of the book value of the related property, plant and equipment, net of estimated proceeds from the sale of these assets (primarily derived from the sale of real property). Loss before taxes associated with these operations for the year ended December 28, 2014 totaled approximately $187,000.

On December 28, 2014 the restaurants were valued at the estimated proceeds from the sale and were recorded as Assets held for sale in the Consolidated Balance Sheet. Two of these properties were sold during the third quarter of fiscal 2015 and the first quarter of fiscal 2016, respectively. On January 3, 2016, the remaining property’s fair value was reclassified to property, equipment and leasehold improvements, net because it is probable that the assets will not be sold in the next in the next 12 months.

Fiscal 2015 Asset Impairment and Estimated Lease Termination and Other Closing Costs (in thousands):

Restaurants		Reason		Amount

Smithtown, NY		Asset impairment⁽¹⁾	$	935
N. Riverside, IL		Lease termination costs⁽²⁾		368
Richmond, VA area restaurants		Costs for closed locations		143
N. Riverside, IL		Site costs-restaurants not opened⁽³⁾		122
Chicago, IL field office		Lease termination costs⁽⁴⁾		106
Eden Prairie, MN		Costs for closed restaurants		(42)
Other		Costs for closed locations		(112)
	Total for fiscal 2015		$	1,520


⁽¹⁾Asset impairment calculated at June 28, 2015 based upon anticipated sale of Smithtown restaurant, which occurred in the third quarter of fiscal 2015.
⁽²⁾Lease termination costs associated with the cancellation of a potential new restaurant location.
⁽³⁾Write-off of failed site preparation costs for two locations the Company decided not to open.
⁽⁴⁾Includes $191,000 in write-off for closed Lombard, Illinois field office site lease commitment partially offset by an $86,000 recapture of deferred rent credits.

Fiscal 2014 Asset Impairment and Estimated Lease Termination and Other Closing Costs (in thousands):

Restaurants		Reason		Amount

Richmond, VA area restaurants		Asset impairment⁽¹⁾	$	2,285
May's Landing, NJ		Asset impairment⁽¹⁾		766
Two Minneapolis, MN area restaurants		Asset impairment⁽¹⁾		544
Décor		Asset impairment⁽²⁾		342
Des Moines, IA		Asset impairment⁽¹⁾		226
Salisbury, MD		Restaurant closing costs⁽³⁾		187
Décor Warehouse		Lease termination costs⁽⁴⁾		94
Richmond, VA area restaurants		Restaurant closing costs⁽⁵⁾		54
Salisbury, MD		Lease termination costs⁽⁶⁾		19
	Total for fiscal 2014		$	4,517


⁽¹⁾Based on the Company's assessment of expected cash flows, an asset impairment charge was recorded for these restaurants. The remaining asset balances can be recovered through sale or transferred to other restaurants.
⁽²⁾Change in strategy regarding décor resulted in the impairment of the décor located in the company's restaurants.
⁽³⁾Write-off of obsolete restaurant equipment.
⁽⁴⁾Lease termination costs associated with closure of the décor warehouse.
⁽⁵⁾Costs associated with anticipated future closures.
⁽⁶⁾Lease termination costs associated with closure of the restaurant, net of deferred rent credits.

Fiscal 2013 Asset Impairment and Estimated Lease Termination and Other Closing Costs (in thousands):

Restaurant		Reason		Amount

Salisbury, MD		Asset impairment⁽¹⁾	$	943
Oakton, VA		Lease termination fee⁽²⁾		200
Gaithersburg, MD		Costs for closed restaurants⁽³⁾		38
	Total for fiscal 2013		$	1,181


⁽¹⁾Based on the Company's assessment of expected cash flows, an asset impairment charge was recorded for this restaurant. The remaining balance can be transferred to other restaurants.
⁽²⁾Lease costs associated with terminating lease for this restaurant.
⁽³⁾The Company incurred various costs for this restaurant which closed at the end of its natural lease term.

Below reflects the change in our reserve for lease termination costs for fiscal 2015 and 2014:

(in thousands)		Balance at Beginning of Period	Additions Charged to Costs and Expenses	Deductions Credits to Costs and Expenses and Other Accounts		Balance at End of Period

Year ended January 3, 2016
Reserve for lease termination costs	$	16.0	286.2	(69.3)	$	232.9

Year ended December 28, 2014
Reserve for lease termination costs	$	---	116.0	(100.0)	$	16.0

Year ended December 29, 2013
Reserve for lease termination costs	$	---	---	---	$	---

These amounts were recorded in other current liabilities or other liabilities depending on when we expected the amounts to be paid.