Property and Equipment, Intangible Assets and Goodwill

12 Months Ended

Aug. 26, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment, Intangible Assets and Goodwill

The cost, net of impairment, and accumulated depreciation of property and equipment at August 26, 2020 and August 28, 2019, together with the related estimated useful lives used in computing depreciation and amortization, were as follows:


	August 26, 2020		August 28, 2019		Estimated Useful Lives (years)
	(In thousands)
Land	$	42,572	$	45,845		—
Restaurant equipment and furnishings	60,685		67,015		3	to	15
Buildings	114,909		126,957		20	to	33
Leasehold and leasehold improvements	20,429		22,098			Lesser of lease term or estimated useful life
Office furniture and equipment	3,178		3,364		3	to	10

	241,773		265,279
Less accumulated depreciation and amortization	(141,174)		(143,536)
Property and equipment, net	$	100,599	$	121,743
Intangible assets, net	$	15,343	$	16,781	15	to	21
Goodwill	$	195	$	514

Depreciation expense for the fiscal years 2020 and 2019, was $10.1 million and $12.6 million, respectively.

Intangible assets, net, consist primarily of the Fuddruckers trade name and franchise agreements and will be 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 accounting life of 15 years from the date of acquisition December 2012.

The aggregate amortization expense related to intangible assets subject to amortization for fiscal 2020 and 2019 was $1.4 million and $1.4 million, respectively. The aggregate amortization expense related to intangible assets subject to amortization is expected to be $1.4 million in each of the next five successive years.

The following table presents intangible assets as of August 26, 2020 and August 28, 2019:


	August 26, 2020						August 28, 2019
	(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	$	29,496	$	(14,189)	$	15,307	$	29,486	$	(12,752)	$	16,734
Cheeseburger in Paradise trade name and license agreements	146		(110)		36		146		(99)		47
Intangible assets, net	$	29,642	$	(14,299)	$	15,343	$	29,632	$	(12,851)	$	16,781

Goodwill, net of accumulated impairments of $2.0 million and $1.7 million in fiscal 2020 and 2019, respectively, was $0.2 million as of August 26, 2020 and $0.5 million as of August 28, 2019. Goodwill has been allocated to and impairment is assessed at the reporting unit level, which is the individual restaurants within our Fuddruckers and Cheeseburger in Paradise restaurant segments that were acquired in fiscal 2010 and fiscal 2013, respectively. The net Goodwill balance at the end of fiscal 2020 is comprised of amounts assigned to one Cheeseburger in Paradise restaurants that were converted to Fuddruckers restaurants, and the goodwill from the Fuddruckers acquisition in 2010. The Company performs a goodwill impairment test annually as of the end of the second quarter of each year and more frequently when negative conditions or a triggering event arise. 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 unit level. Due to the effects of the COVID-19 pandemic on our operations, we identified a triggering event in the third quarter of fiscal 2020. We performed an impairment test of goodwill and recorded an impairment loss related to our Cheeseburger in Paradise restaurants of $0.3 million.The Company recorded goodwill impairment charges of $320 thousand and $41 thousand in fiscal 2020 and 2019, respectively.