Acquisition of Franchised Restaurants Acquisition of Franchised Restaurants

9 Months Ended

Sep. 29, 2015

Business Combinations [Abstract]

Acquisition of Franchised Restaurants

Acquisition of Franchised Restaurants

On July 2, 2014, the Company acquired 16 restaurants from one of its franchisees. The cash purchase price was $13.6 million and the Company incurred acquisition costs related to the transaction of approximately $60,000 reflected in General and Administrative expense for the three quarters ended September 30, 2014. The consolidated statements of income include the results of operations for the restaurants from the date of acquisition. The pro forma impact of the acquisition is not presented as the impact was not material to reported results.

The Company allocated the purchase price to the tangible and intangible assets acquired and liabilities assumed at the acquisition date at their estimated fair values with the remainder allocated to goodwill. During the fourth quarter of 2014, the Company finalized the purchase price accounting of the above acquisition and recorded certain immaterial purchase accounting adjustments, which are reflected in the purchase price allocation table as follows (in thousands):

10. Acquisition of Franchised Restaurants (continued)

	Fair Value at July 2, 2014
Inventories	$	292
Prepaid expenses and other assets	27
Property and equipment	5,649
Intangibles	1,421
Goodwill	6,400
Deferred Rent and Other Liabilities	(154		)
Total purchase price	$	13,635

The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 measurement that is subject to change.