Reorganization and Realignment Costs

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



	Year Ended
	2017		2016		2015
G&A realignment - May 2017 plan	$	21,663	$	—	$	—
G&A realignment - November 2014 plan	—		692		10,342
System optimization initiative	911		9,391		11,568
Reorganization and realignment costs	$	22,574	$	10,083	$	21,910

General and Administrative (“G&A”) Realignment

May 2017 Plan

In May 2017, the Company initiated a new plan to further reduce its G&A expenses. The Company expects to incur total costs aggregating approximately $28,000 to $33,000 related to the plan. The Company recognized costs totaling $21,663 during 2017, which primarily included severance and related employee costs, share-based compensation and third-party and other costs. The Company expects to incur additional costs aggregating approximately $6,000 to $11,000, comprised of (1) severance and related employee costs of approximately $2,000, (2) recruitment and relocation costs of approximately $4,000, (3) third-party and other costs of approximately $1,000 and (4) share-based compensation of approximately $2,000. The Company expects to continue to recognize costs associated with the plan into 2019.

The following is a summary of the activity recorded as a result of the May 2017 plan:



	Year Ended
	2017
Severance and related employee costs	$	14,956
Recruitment and relocation costs	489
Third-party and other costs	1,091
	16,536
Share-based compensation (a)	5,127
Total G&A realignment - May 2017 plan	$	21,663

_______________


(a)	Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our May 2017 plan.

As of December 31, 2017, the accruals for our May 2017 plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $8,467 and $3,803, respectively. The table below presents a rollforward of our accruals for the May 2017 plan.



	Balance January 1, 2017		Charges		Payments			Balance December 31, 2017
Severance and related employee costs	$	—	$	14,956	$	(2,863	)	$	12,093
Recruitment and relocation costs	—		489		(312		)	177
Third-party and other costs	—		1,091		(1,091		)	—
	$	—	$	16,536	$	(4,266	)	$	12,270

November 2014 Plan

In November 2014, the Company initiated a plan to reduce its G&A 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 of $23,960 in aggregate since inception. The Company did not incur any expenses during 2017 and does not expect to incur additional costs related to the plan.

The following is a summary of the activity recorded as a result of the November 2014 plan:



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

The table below presents a rollforward of our accruals for our November 2014 plan during 2016, which were included in “Accrued expenses and other current liabilities” and “Other liabilities.” As of December 31, 2017, no accrual remained.



	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

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 does not expect to incur additional costs in connection with dispositions under our system optimization initiative.

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



	Year Ended						Total Incurred Since Inception
	2017		2016		2015		Total Incurred Since Inception
Severance and related employee costs	$	3	$	82	$	894	$	18,237
Professional fees	838		7,437		3,360		17,448
Other	70		272		930		5,813
	911		7,791		5,184		41,498
Accelerated depreciation and amortization (a)	—		1,600		6,384		25,398
Share-based compensation (b)	—		—		—		5,013
Total system optimization initiative	$	911	$	9,391	$	11,568	$	71,909

_______________


(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 accruals for our system optimization initiative, which were included in “Accrued expenses and other current liabilities.”



	Balance January 1, 2017		Charges		Payments			Balance December 31, 2017
Severance and related employee costs	$	—	$	3	$	(3	)	$	—
Professional fees	101		838		(939		)	—
Other	—		70		(70		)	—
	$	101	$	911	$	(1,012	)	$	—



	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