Reorganization and Realignment Costs

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



	Year Ended
	2016		2015		2014
G&A realignment	$	692	$	10,342	$	12,926
System optimization initiative	9,391		11,568		18,977
Reorganization and realignment costs	$	10,083	$	21,910	$	31,903

General and Administrative (“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 $692 during 2016 and $23,960 in aggregate since inception. No additional costs are expected to be incurred under the G&A realignment plan.

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



	Year Ended							Total Incurred Since Inception
	2016			2015		2014		Total Incurred Since Inception
Severance and related employee costs (a)	$	(344	)	$	3,011	$	11,917	$	14,584
Recruitment and relocation costs	992			1,658		209		2,859
Other	44			49		88		181
	692			4,718		12,214		17,624
Share-based compensation (b)	—			5,624		712		6,336
Total G&A realignment	$	692		$	10,342	$	12,926	$	23,960

_______________


(a)	2016 includes a reversal of an accrual of $387 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 January 1, 2017
Severance and related employee costs	$	3,431	$	(344	)	$	(2,855	)	$	232
Recruitment and relocation costs	144		992			(1,136		)	—
Other	—		44			(44		)	—
	$	3,575	$	692		$	(4,035	)	$	232



	Balance December 28, 2014		Charges		Payments			Balance January 3, 2016
Severance and related employee costs	$	11,609	$	3,011	$	(11,189	)	$	3,431
Recruitment and relocation costs	149		1,658		(1,663		)	144
Other	5		49		(54		)	—
	$	11,763	$	4,718	$	(12,906	)	$	3,575

System Optimization Initiative

The Company has recognized costs related to its system optimization initiative, which includes a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating franchisee-to-franchisee restaurant transfers. The Company expects to incur additional costs, primarily comprised of professional fees, of approximately $1,300 during 2017 in connection with an in-process transaction as of January 1, 2017. Costs incurred during 2017 related to facilitating franchisee-to-franchisee transfers of restaurants will be recorded to “Other operating income, net.”

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



	Year Ended						Total Incurred Since Inception
	2016		2015		2014		Total Incurred Since Inception
Severance and related employee costs	$	82	$	894	$	7,608	$	18,234
Professional fees	7,437		3,360		3,424		16,610
Other	272		930		3,678		5,743
	7,791		5,184		14,710		40,587
Accelerated depreciation and amortization (a)	1,600		6,384		507		25,398
Share-based compensation (b)	—		—		3,760		5,013
Total system optimization initiative	$	9,391	$	11,568	$	18,977	$	70,998

_______________


(a)	Primarily includes accelerated amortization of previously acquired franchise rights related to Company-operated restaurants in territories that 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 January 1, 2017
Severance and related employee costs	$	77	$	82	$	(159	)	$	—
Professional fees	708		7,437		(8,044		)	101
Other	90		272		(362		)	—
	$	875	$	7,791	$	(8,565	)	$	101



	Balance December 28, 2014		Charges		Payments			Balance January 3, 2016
Severance and related employee costs	$	2,235	$	894	$	(3,052	)	$	77
Professional fees	146		3,360		(2,798		)	708
Other	423		930		(1,263		)	90
	$	2,804	$	5,184	$	(7,113	)	$	875