Restaurant Impairments, Closure Costs and Asset Disposals

3 Months Ended

Mar. 29, 2022

Discontinued Operations and Disposal Groups [Abstract]

Restaurant Impairments, Closure Costs and Asset Disposals

The following table presents restaurant impairments, closure costs and asset disposals (in thousands):


	Fiscal Quarter Ended
	March 29, 2022		March 30, 2021
Restaurant impairments (1)	$	106	$	502
Closure costs (1)	389		305
Loss on disposal of assets and other	894		424
	$	1,389	$	1,231

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(1)Restaurant impairments and closure costs in all periods presented above include amounts related to restaurants previously impaired or closed.

The Company did not impair any restaurants in the first quarter of 2022 and had one restaurant impairment in the first quarter of 2021. Impairment is based on management’s current assessment of the expected future cash flows of a restaurant based on recent results and other specific market factors. Impairment expense is a Level 3 fair value measure and is determined by comparing the carrying value of restaurant assets to the estimated fair value of the restaurant assets at resale value and the right-of-use asset based on a discounted cash flow analysis utilizing market lease rates. The Company will continue to monitor the impact from the COVID-19 pandemic as it relates to recoverability of long-lived assets. Although the Company has seen an improvement in sales, the Company is unable to predict how long these conditions will persist, what additional measures may be introduced by governments or what effect any such additional measures may have on restaurants and our business. Any measure that encourages consumers to stay in their homes, engage in social distancing or avoid larger gatherings of people for an extended period of time is and has been highly likely to continue to be harmful to the restaurant industry in general.

Closure costs in the first quarter of 2022 include ongoing costs related to restaurants closed in previous years as well as two company-owned restaurant closures during the first quarter of 2022. Closure costs in the first quarter of 2021 include ongoing costs related to restaurants closed in previous years, as well as six company-owned restaurant closures during the first quarter of 2021.

Loss on disposal of assets and other for the first quarter of 2022 includes expenses related to the divestiture of company-owned restaurants related to the Warner Sale. Both periods include disposals of assets in the normal course of business.

These expenses are included in the “Restaurant impairments, closure costs and asset disposals” line in the Condensed Consolidated Statements of Operations.