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System Optimization (Gains) Losses, Net
 3 Months Ended
Apr. 03, 2016
Property, Plant and Equipment [Abstract]  
System Optimization (Gains) Losses, Net
System Optimization (Gains) Losses, Net

In July 2013, the Company announced a system optimization initiative, as part of its brand transformation, which includes a shift from company-owned restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as helping to facilitate franchisee-to-franchisee restaurant transfers. In February 2015, the Company announced plans to sell approximately 540 additional restaurants to franchisees and reduce its ongoing company-owned restaurant ownership to approximately 5% of the total system by the end of 2016. During 2015, 2014 and 2013, the Company completed the sale of 327, 255 and 244 company-owned restaurants to franchisees, respectively, which included the sale of all of its company-owned restaurants in Canada. In addition, the Company helped facilitate the transfer of 113 restaurants between franchisees during the three months ended April 3, 2016. The Company expects to complete its plan to reduce company-owned restaurant ownership to approximately 5% of the total system with the sale of approximately 260 restaurants during the remainder of 2016, of which 86 restaurants were classified as held for sale as of April 3, 2016.
Gains and losses recognized on dispositions are recorded to “System optimization (gains) losses, net” in our condensed consolidated statements of operations. Costs related to our system optimization initiative are recorded to “Reorganization and realignment costs,” and include severance and employee related costs, professional fees and other associated costs, which are further described in Note 5.

The following is a summary of the disposition activity recorded as a result of our system optimization initiative:
 
Three Months Ended
 
April 3,
2016
 
March 29,
2015
Number of restaurants sold to franchisees
55

 
17

 
 
 
 
Proceeds from sales of restaurants
$
39,615

 
$
4,581

Net assets sold (a)
(17,055
)
 
(2,222
)
Goodwill related to sales of restaurants
(6,376
)
 
(1,023
)
Net unfavorable leases (b)
(4,906
)
 
(528
)
Other
(795
)
 
(402
)
 
10,483

 
406

Post-closing adjustments on sales of restaurants
(2,135
)
 
(1,573
)
Gain (loss) on sales of restaurants, net
8,348

 
(1,167
)
 
 
 
 
Gain on sales of other assets, net (c)
78

 
362

System optimization gains (losses), net
$
8,426

 
$
(805
)
_______________

(a)
Net assets sold consisted primarily of inventory and equipment.

(b)
During the three months ended April 3, 2016 and March 29, 2015, the Company recorded favorable lease assets of $183 and $2,379, respectively, and unfavorable lease liabilities of $5,089 and $2,907, respectively, as a result of leasing and/or subleasing land, buildings, and/or leasehold improvements to franchisees, in connection with sales of restaurants.

(c)
During the three months ended April 3, 2016 and March 29, 2015, the Company received cash proceeds of $1,570 and $1,693, respectively, primarily from the sale of surplus properties.

Assets Held for Sale
 
April 3,
2016
 
January 3, 2016
Number of restaurants classified as held for sale
86

 
99

Net restaurant assets held for sale (a)
$
41,622

 
$
50,262

 
 
 
 
Other assets held for sale (a)
$
6,925

 
$
7,124

_______________

(a)
Net restaurant assets held for sale include company-owned restaurants and consist primarily of cash, inventory, equipment and an estimate of allocable goodwill. Other assets held for sale primarily consist of surplus properties. Assets held for sale are included in “Prepaid expenses and other current assets.”