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Reorganization and Realignment Costs
 3 Months Ended
Apr. 04, 2021
Restructuring and Related Activities [Abstract]  
Reorganization and Realignment Costs Reorganization and Realignment Costs
The following is a summary of the initiatives included in “Reorganization and realignment costs:”
Three Months Ended
April 4,
2021		March 29,
2020
Operations and field realignment$274 $— 
IT realignment— 3,559 
G&A realignment(18)267 
System optimization initiative4,678 84 
Reorganization and realignment costs$4,934 $3,910 

Operations and Field Realignment

In September 2020, the Company initiated a plan to reallocate resources to better support the long-term growth strategies for Company and franchise operations (the “Operations and Field Realignment Plan”). The Operations and Field Realignment Plan realigned the Company’s restaurant operations team, including transitioning from separate leaders of Company and franchise operations to a single leader of all U.S. restaurant operations. We also expect to incur contract termination charges, including the planned closure of certain field offices. The Company expects to incur total costs aggregating approximately $7,000 to $9,000 related to the Operations and Field Realignment Plan. During the three months ended April 4, 2021, the Company recognized costs totaling $274, which primarily included severance and related employee costs. The Company expects to incur additional costs aggregating approximately $3,000 to $5,000, comprised primarily of third-party and other costs. The Company expects to recognize the majority of the remaining costs associated with the Operations and Field Realignment Plan during the remainder of 2021.

The following is a summary of the activity recorded as a result of the Operations and Field Realignment Plan:
Three Months EndedTotal
Incurred Since Inception
April 4,
2021
Severance and related employee costs$254 $3,367 
Third-party and other costs20 87 
274 3,454 
Share-based compensation (a)— 621 
Total operations and field realignment$274 $4,075 
_______________

(a)Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under the Operations and Field Realignment Plan.

The table below presents a rollforward of our accruals for the Operations and Field Realignment Plan, which are included in “Accrued expenses and other current liabilities” as of April 4, 2021.
Balance
January 3, 2021		ChargesPaymentsBalance
April 4,
2021
Severance and related employee costs$2,600 $254 $(1,410)$1,444 
Third-party and other costs— 20 (20)— 
$2,600 $274 $(1,430)$1,444 
Information Technology (“IT”) Realignment

In December 2019, our Board of Directors approved a plan to realign and reinvest resources in the Company’s IT organization to strengthen its ability to accelerate growth (the “IT Realignment Plan”). The Company has partnered with a third-party global IT consultant on this new structure to leverage their global capabilities, which will enable a more seamless integration between its digital and corporate IT assets. The IT Realignment Plan has reduced certain employee compensation and other related costs that the Company has reinvested back into IT to drive additional capabilities and capacity across all of its technology platforms. Additionally, in June 2020, the Company made changes to its leadership structure that included the elimination of the Chief Digital Experience Officer position and the creation of a Chief Information Officer position, for which the Company completed the hiring process in October 2020. During the three months ended March 29, 2020, the Company recognized costs totaling $3,559, which primarily included third-party and other costs. The Company does not expect to incur any material additional costs under the IT Realignment Plan.

The following is a summary of the activity recorded as a result of the IT Realignment Plan:
Three Months EndedTotal
Incurred Since Inception
April 4,
2021		March 29,
2020
Severance and related employee costs (a)$(111)$145 $8,280 
Recruitment and relocation costs108 171 1,404 
Third-party and other costs3 3,243 6,538 
— 3,559 16,222 
Share-based compensation (b)— — 193 
Total IT realignment $— $3,559 $16,415 
_______________

(a)The three months ended April 4, 2021 includes a reversal of an accrual as a result of a change in estimate.

(b)Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under the IT Realignment Plan.

The accruals for the IT Realignment Plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $689 and $41 as of April 4, 2021 and $6,744 and $237 as of March 29, 2020, respectively. The tables below present a rollforward of our accruals for the IT Realignment Plan.
Balance
January 3, 2021		ChargesPaymentsBalance
April 4,
2021
Severance and related employee costs$1,508 $(111)$(667)$730 
Recruitment and relocation costs— 108 (108)— 
Third-party and other costs— 3 (3)— 
$1,508 $— $(778)$730 
Balance
December 29, 2019		ChargesPaymentsBalance
March 29,
2020
Severance and related employee costs$7,548 $145 $(712)$6,981 
Recruitment and relocation costs— 171 (171)— 
Third-party and other costs1,076 3,243 (4,319)— 
$8,624 $3,559 $(5,202)$6,981 
General and Administrative (“G&A”) Realignment

In May 2017, the Company initiated a plan to further reduce its G&A expenses (the “G&A Realignment Plan”). Additionally, in May 2019, the Company announced changes to its management and operating structure that included the creation of two new positions, a President, U.S. and Chief Commercial Officer and a President, International and Chief Development Officer, and the elimination of the Chief Operations Officer position. During the three months ended March 29, 2020, the Company recognized costs totaling $267, which primarily included severance and related employee costs and share-based compensation. The Company does not expect to incur any material additional costs under the G&A Realignment Plan.

The following is a summary of the activity recorded as a result of the G&A Realignment Plan:
Three Months EndedTotal
Incurred Since Inception
April 4,
2021		March 29,
2020
Severance and related employee costs (a)$(31)$152 $24,235 
Recruitment and relocation costs1 15 2,877 
Third-party and other costs1 1 2,224 
(29)168 29,336 
Share-based compensation (b)11 99 8,122 
Termination of defined benefit plans— — 1,335 
Total G&A realignment$(18)$267 $38,793 
_______________

(a)The three months ended April 4, 2021 includes a reversal of an accrual as a result of a change in estimate.

(b)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 4, 2021, the accruals for the G&A realignment plan are included in “Accrued expenses and other current liabilities.” As of March 29, 2020, the accruals for the G&A realignment plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled and $3,781 and $408, respectively. The tables below present a rollforward of our accruals for the G&A Realignment Plan.
Balance
January 3,
2021		ChargesPaymentsBalance
April 4,
2021
Severance and related employee costs$932 $(31)$(501)$400 
Recruitment and relocation costs— 1 (1)— 
Third-party and other costs— 1 (1)— 
$932 $(29)$(503)$400 
Balance
December 29,
2019		ChargesPaymentsBalance
March 29,
2020
Severance and related employee costs$5,276 $152 $(1,306)$4,122 
Recruitment and relocation costs83 15 (31)67 
Third-party and other costs— 1 (1)— 
$5,359 $168 $(1,338)$4,189 

System Optimization Initiative

The Company recognizes costs related to acquisitions and dispositions under its system optimization initiative. During the three months ended April 4, 2021, the Company recognized costs totaling $4,678, which were primarily comprised of the write-off of certain lease assets and lease termination fees associated with the NPC bankruptcy sale process. See Note 3 for further
information. The Company expects to recognize a gain of approximately $1,400 related to the write-off of certain NPC-related lease liabilities upon final termination of the leases.

The following is a summary of the costs recorded as a result of our system optimization initiative:
Three Months EndedTotal
Incurred Since Inception
April 4,
2021		March 29, 2020
Severance and related employee costs$— $— $18,237 
Professional fees235 80 22,342 
Other (a)1,354 4 7,207 
1,589 84 47,786 
Accelerated depreciation and amortization (b)— — 25,398 
NPC lease termination costs (c)3,089 — 3,089 
Share-based compensation (d)— — 5,013 
Total system optimization initiative$4,678 $84 $81,286 
_______________

(a)The three months ended April 4, 2021 includes transaction fees of $1,350 associated with the NPC bankruptcy sale process.

(b)Primarily includes accelerated amortization of previously acquired franchise rights related to the Company-operated restaurants in territories that have been sold to franchisees in connection with our system optimization initiative.

(c)The three months ended April 4, 2021 includes the write-off of lease assets of $1,609 and lease termination fees paid of $1,480.

(d)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 accruals for our system optimization initiative, which are included in “Accrued expenses and other current liabilities.”
Balance
January 3,
2021		ChargesPaymentsBalance
April 4,
2021
Professional fees$1,230 $235 $(1,461)$4 
Other— 1,354 (1,354)— 
$1,230 $1,589 $(2,815)$4