Restaurant Impairments, Closure Costs and Asset Disposals

6 Months Ended

Jul. 04, 2023

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				Two Fiscal Quarters Ended
	July 4, 2023		June 28, 2022		July 4, 2023		June 28, 2022
Restaurant impairments (1)	$	423	$	668	$	509	$	774
Closure costs (1)	249		465		807		855
Loss on disposal of assets and other	937		838		1,862		1,731
	$	1,609	$	1,971	$	3,178	$	3,360

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

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. There was one restaurant impairment during the second quarter of 2023 and the first two quarters of 2023. Two restaurants were identified as impaired in the second quarter of 2022 and the first two quarters of 2022.

We permanently closed two company-owned restaurants in the second quarter of 2023, one of which was an early lease termination. The Company did not close any restaurants in the second quarter of 2022. Closure costs in the second quarter of 2023 and 2022 also included ongoing expenses from restaurant closures in prior years.

We permanently closed four company-owned restaurants in the first two quarters of 2023, two of which were early lease terminations. The Company closed two restaurants in the first two quarters of 2022. Closure costs in the first two quarters of 20223 and 2022 also included ongoing expenses from restaurant closures in prior years.

Both periods include asset disposals in the normal course of business and lease related costs and expenses in connection with the divestiture of company-owned restaurants in previous years.