Reorganization and Realignment Costs

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



	Three Months Ended
	April 1, 2018		April 2, 2017
G&A realignment	$	2,626	$	—
System optimization initiative	—		181
Reorganization and realignment costs	$	2,626	$	181

General and Administrative (“G&A”) Realignment

In May 2017, the Company initiated a 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 $2,626 during the three months ended April 1, 2018, which primarily included severance and related employee costs. The Company expects to incur additional costs aggregating approximately $3,000 to $8,000, comprised of (1) severance and related employee costs of approximately $1,000, (2) recruitment and relocation costs of approximately $3,000, (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 G&A realignment plan:



	Three Months Ended		Total Incurred Since Inception
	April 1, 2018		Total Incurred Since Inception
Severance and related employee costs	$	2,059	$	17,015
Recruitment and relocation costs	148		637
Third-party and other costs	328		1,419
	2,535		19,071
Share-based compensation (a)	91		5,218
Total G&A realignment	$	2,626	$	24,289

_______________


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

As of April 1, 2018, the accruals for our G&A realignment plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $8,781 and $2,731, respectively. The table below presents a rollforward of our accruals for the plan.



	Balance December 31, 2017		Charges		Payments			Balance April 1, 2018
Severance and related employee costs	$	12,093	$	2,059	$	(2,844	)	$	11,308
Recruitment and relocation costs	177		148		(121		)	204
Third-party and other costs	—		328		(328		)	—
	$	12,270	$	2,535	$	(3,293	)	$	11,512

System Optimization Initiative

The Company recognized costs related to its system optimization initiative, which included a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating Franchise Flips.

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 2, 2017		Total Incurred Since Inception
Severance and related employee costs	$	3	$	18,237
Professional fees	130		17,448
Other	48		5,813
	181		41,498
Accelerated depreciation and amortization (a)	—		25,398
Share-based compensation (b)	—		5,013
Total system optimization initiative	$	181	$	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 table below presents a rollforward of our accrual for our system optimization initiative, which is included in “Accrued expenses and other current liabilities.” As of April 1, 2018, no accrual remained.



	Balance January 1, 2017		Charges		Payments			Balance April 2, 2017
Severance and related employee costs	$	—	$	3	$	(3	)	$	—
Professional fees	101		130		(143		)	88
Other	—		48		(48		)	—
	$	101	$	181	$	(194	)	$	88