Restaurant Impairments, Closure Costs and Asset Disposals

9 Months Ended

Oct. 03, 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				Three Fiscal Quarters Ended
	October 3, 2023		September 27, 2022		October 3, 2023		September 27, 2022
Restaurant impairments (1)	$	731	$	412	$	1,240	$	1,186
Closure costs (1)	189		370		996		1,224
Loss on disposal of assets and other	1,215		890		3,077		2,622
	$	2,135	$	1,672	$	5,313	$	5,032

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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.

In the third quarter of 2023, the Company wrote down lease related assets for two restaurants previously closed. There were no impairment charges for fixed assets in the third quarter of 2023. In the third quarter of 2022, the Company wrote down lease related assets for one restaurant. The Company also recorded fixed asset impairments for two restaurants in the third quarter of 2022.

During the first three quarters of 2023, the Company recorded fixed asset impairment related to one restaurant and wrote down lease related assets on four restaurants. During the first three quarters of 2022, the Company wrote down lease related assets for two restaurants and fixed asset impairment for four restaurants.

The Company did not close any restaurants during the third quarters of 2023 and 2022, respectively. Closure costs in the third quarters of 2023 and 2022 included ongoing expenses from restaurant closures in prior periods.

We permanently closed four company-owned restaurants in the first three quarters of 2023, two of which were early lease terminations. The Company closed two restaurants in the first three quarters of 2022. Closure costs in the first three quarters of 2023 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.