Reorganization and Realignment Costs

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



	Year Ended
	2018		2017		2016
G&A realignment - May 2017 plan	$	8,785	$	21,663	$	—
G&A realignment - November 2014 plan	—		—		692
System optimization initiative	283		911		9,391
Reorganization and realignment costs	$	9,068	$	22,574	$	10,083

General and Administrative (“G&A”) Realignment

May 2017 Plan

In May 2017, the Company initiated a plan to further reduce its G&A expenses following the November 2014 plan discussed below. The Company expects to incur total costs aggregating approximately $32,000 to $35,000 related to the plan. The Company recognized costs totaling $8,785 and $21,663 during 2018 and 2017, respectively, which primarily included severance and related employee costs and share-based compensation. The Company expects to incur additional costs aggregating approximately $4,500, comprised of (1) severance and related employee costs of approximately $1,000, (2) recruitment and relocation costs of approximately $1,500, (3) third-party and other costs of approximately $500 and (4) share-based compensation of approximately $1,500. The Company expects to recognize the majority of the remaining costs associated with the plan during 2019.

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



	Year Ended				Total Incurred Since Inception
	2018		2017		Total Incurred Since Inception
Severance and related employee costs	$	3,797	$	14,956	$	18,753
Recruitment and relocation costs	1,077		489		1,566
Third-party and other costs	1,019		1,091		2,110
	5,893		16,536		22,429
Share-based compensation (a)	1,557		5,127		6,684
Termination of defined benefit plans (b)	1,335		—		1,335
Total G&A realignment - May 2017 plan	$	8,785	$	21,663	$	30,448

_______________


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


(b)	During 2018, the Company terminated two frozen defined benefit plans. See Note 19 for further information.

The accruals for our May 2017 plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $6,280 and $1,044 as of December 30, 2018, respectively, and $8,467 and $3,803 as of December 31, 2017, respectively. The tables below present a rollforward of our accruals for the May 2017 plan.



	Balance December 31, 2017		Charges		Payments			Balance December 30, 2018
Severance and related employee costs	$	12,093	$	3,797	$	(8,649	)	$	7,241
Recruitment and relocation costs	177		1,077		(1,171		)	83
Third-party and other costs	—		1,019		(1,019		)	—
	$	12,270	$	5,893	$	(10,839	)	$	7,324



	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 total costs of $23,960 since the inception of the November 2014 plan. The Company did not incur any expenses during 2018 or 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			Total Incurred Since Inception
Severance and related employee costs (a)	$	(344	)	$	14,584
Recruitment and relocation costs	992			2,859
Other	44			181
	692			17,624
Share-based compensation (b)	—			6,336
Total G&A realignment - November 2014 plan	$	692		$	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 the November 2014 plan.

The table below presents a rollforward of our accruals for the November 2014 plan during 2016, which were included in “Accrued expenses and other current liabilities” and “Other liabilities.” As of December 30, 2018 and 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 Franchise Flips. During 2019, the Company expects to incur approximately $500 of additional costs in connection with dispositions under our system optimization initiative, which are primarily comprised of professional fees.

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



	Year Ended						Total Incurred Since Inception
	2018		2017		2016		Total Incurred Since Inception
Severance and related employee costs	$	—	$	3	$	82	$	18,237
Professional fees	264		838		7,437		17,712
Other	19		70		272		5,832
	283		911		7,791		41,781
Accelerated depreciation and amortization (a)	—		—		1,600		25,398
Share-based compensation (b)	—		—		—		5,013
Total system optimization initiative	$	283	$	911	$	9,391	$	72,192

_______________


(a)	Primarily includes accelerated amortization of previously acquired franchise rights related to Company-operated restaurants in territories that have been sold to franchisees 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” and “Other liabilities.” As of December 30, 2018, no accrual remained.



	Balance January 1, 2017		Charges		Payments			Balance December 31, 2017
Severance and related employee costs	$	—	$	3	$	(3	)	$	—
Recruitment and relocation costs	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	)	$	—
Recruitment and relocation costs	708		7,437		(8,044		)	101
Other	90		272		(362		)	—
	$	875	$	7,791	$	(8,565	)	$	101