Property and Equipment, Intangible Assets and Goodwill

9 Months Ended

Jun. 03, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, Intangible Assets and Goodwill

The costs, net of impairment, and accumulated depreciation of property and equipment at June 3, 2020 and August 28, 2019, together with the related estimated useful lives used in computing depreciation and amortization, were as follows:


	June 3, 2020		August 28, 2019		Estimated Useful Lives (years)
	(In thousands)
Land	$	43,350	$	45,845		—
Restaurant equipment and furnishings	60,565		67,015		3	to	15
Buildings	119,811		126,957		20	to	33
Leasehold and leasehold improvements	22,086		22,098		Lesser of lease term or estimated useful life
Office furniture and equipment	3,234		3,364		3	to	10

	249,046		265,279
Less accumulated depreciation and amortization	(144,758)		(143,536)
Property and equipment, net	$	104,288	$	121,743
Intangible assets, net	$	15,695	$	16,781	15	to	21

Intangible assets, net, includes the Fuddruckers trade name and franchise agreements and are amortized. The Company believes the Fuddruckers brand name has an expected accounting life of 21 years from the date of acquisition based on the expected use of its assets and the restaurant environment in which it is being used. The trade name represents a respected brand with customer loyalty and the Company intends to cultivate and protect the use of the trade name. The franchise agreements, after considering renewal periods, have an estimated accounting life of 21 years from the date of acquisition, July 2010, and will be amortized over this period of time.

Intangible assets, net, also includes the license agreement and trade name related to Cheeseburger in Paradise and the value of the acquired licenses and permits allowing the sales of beverages with alcohol. These assets have an expected useful life of 15 years from the date of acquisition, December 2012.

The aggregate amortization expense related to intangible assets subject to amortization was approximately $1.1 million and $1.0 million for the three quarters ended June 3, 2020 and June 5, 2019, respectively. The aggregate amortization expense related to intangible assets subject to amortization is expected to be approximately $1.4 million in each of the next five successive fiscal years.

The following table presents intangible assets as of June 3, 2020 and August 28, 2019:


	June 3, 2020										August 29, 2018
	(In thousands)										(In thousands)
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible Assets Subject to Amortization:

Fuddruckers trade name and franchise agreements	$	29,486	$	(13,828)	$	15,658	$	29,486	$	(12,752)	$	16,734

Cheeseburger in Paradise trade name and license agreements	146		(109)		37		146		(99)		47

Intangible assets, net	$	29,632	$	(13,937)	$	15,695	$	29,632	$	(12,851)	$	16,781

Goodwill, net of accumulated impairments, was approximately $195 thousand and $514 thousand as of June 3, 2020 and August 28, 2019, respectively. Goodwill has been allocated and impairment is assessed at the reporting level, which is the individual restaurants within our Fuddruckers and Cheeseburger in Paradise reporting segments that were acquired in fiscal 2010 and fiscal 2013, respectively. The net Goodwill balance at June 3, 2020 is comprised of amounts from the Fuddruckers acquisition in 2010. The Company performs a goodwill impairment test annually as of the end of the second fiscal quarter of each year and more frequently when negative conditions or a triggering event arises. Management prepares valuations for each of its restaurants using a discounted cash flow analysis (Level 3 inputs) to determine the fair value of each reporting unit for comparison with the reporting unit's carrying value in determining if there has been an impairment of goodwill at the reporting level.

The Company recorded $320 thousand and no goodwill impairment charges during the three quarters ended June 3, 2020 and June 5, 2019, respectively. The fiscal year 2020 impairment charge were to completely impair the goodwill allocated one Cheeseburger in Paradise restaurant and two Cheeseburger in Paradise restaurants that were converted into Fuddruckers restaurants.