Reorganization and Realignment Costs

The following is a summary of the initiatives included in “Reorganization and realignment costs:”



	Three Months Ended
	April 3, 2016		March 29, 2015
G&A realignment	$	527	$	4,163
System optimization initiative	2,723		450
Reorganization and realignment costs	$	3,250	$	4,613

G&A Realignment

In November 2014, the Company initiated a plan to reduce its general and administrative expenses. The plan included a realignment and reinvestment of resources to focus primarily on accelerated restaurant development and consumer-facing restaurant technology to drive long-term growth. The Company achieved the majority of the expense reductions through the realignment of its U.S. field operations and savings at its Restaurant Support Center in Dublin, Ohio, which was substantially completed by the end of the second quarter of 2015. The Company recognized costs totaling $527 during the three months ended April 3, 2016 and $23,795 in aggregate since inception. The Company expects to incur additional costs aggregating approximately $1,300 during the remainder of 2016, comprised primarily of recruitment and relocation costs for the reinvestment in resources to drive long-term growth.

The following is a summary of the activity recorded as a result of our G&A realignment plan:



	Three Months Ended					Total Incurred Since Inception
	April 3, 2016			March 29, 2015		Total Incurred Since Inception
Severance and related employee costs (a)	$	(24	)	$	1,982	$	14,904
Recruitment and relocation costs	540			470		2,407
Other	11			32		148
	527			2,484		17,459
Share-based compensation (b)	—			1,679		6,336
Total G&A realignment	$	527		$	4,163	$	23,795

_______________


(a)	The three months ended April 3, 2016 includes a reversal of an accrual of $32 as a result of a change in estimate.


(b)	Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our G&A realignment plan.

The tables below present a rollforward of our accruals for our G&A realignment plan, which are included in “Accrued expenses and other current liabilities” and “Other liabilities.”



	Balance January 3, 2016		Charges			Payments			Balance April 3, 2016
Severance and related employee costs	$	3,431	$	(24	)	$	(1,673	)	$	1,734
Recruitment and relocation costs	144		540			(386		)	298
Other	—		11			(11		)	—
	$	3,575	$	527		$	(2,070	)	$	2,032



	Balance December 28, 2014		Charges		Payments			Balance March 29, 2015
Severance and related employee costs	$	11,609	$	1,982	$	(3,386	)	$	10,205
Recruitment and relocation costs	149		470		(398		)	221
Other	5		32		(37		)	—
	$	11,763	$	2,484	$	(3,821	)	$	10,426

System Optimization Initiative

The Company has recognized costs related to its system optimization initiative 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. The Company expects to incur additional costs of approximately $5,900 during the remainder of 2016, which are primarily comprised of professional fees of approximately $5,200 and accelerated amortization of previously acquired franchise rights related to company-owned restaurants in territories that will be sold to franchisees of approximately $700.

The following is a summary of the costs recorded as a result of our system optimization initiative:



	Three Months Ended				Total Incurred Since Inception
	April 3, 2016		March 29, 2015		Total Incurred Since Inception
Severance and related employee costs	$	—	$	326	$	18,152
Professional fees	1,701		41		10,874
Other	77		83		5,548
	1,778		450		34,574
Accelerated depreciation and amortization (a)	945		—		24,743
Share-based compensation (b)	—		—		5,013
Total system optimization initiative	$	2,723	$	450	$	64,330

_______________


(a)	Primarily includes accelerated amortization of previously acquired franchise rights related to company-owned restaurants in territories that will be or have been sold in connection with our system optimization initiative.


(b)	Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative.

The tables below present a rollforward of our accrual for our system optimization initiative, which is included in “Accrued expenses and other current liabilities.”



	Balance January 3, 2016		Charges		Payments			Balance April 3, 2016
Severance and related employee costs	$	77	$	—	$	(16	)	$	61
Professional fees	708		1,701		(1,988		)	421
Other	90		77		(117		)	50
	$	875	$	1,778	$	(2,121	)	$	532



	Balance December 28, 2014		Charges		Payments			Balance March 29, 2015
Severance and related employee costs	$	2,235	$	326	$	(1,999	)	$	562
Professional fees	146		41		(52		)	135
Other	423		83		(3		)	503
	$	2,804	$	450	$	(2,054	)	$	1,200