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Reorganization and Realignment Costs
 6 Months Ended
Jul. 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 EndedSix Months Ended
July 4,
2021		June 28,
2020		July 4,
2021		June 28,
2020
Operations and field realignment$1,215 $— $1,489 $— 
IT realignment6 2,847 6 6,406 
G&A realignment(16)64 (34)331 
System optimization initiative897 — 5,575 84 
Reorganization and realignment costs$2,102 $2,911 $7,036 $6,821 

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. The Operations and Field Realignment Plan also includes contract terminations, including the closure of certain field offices. The Company expects to incur total costs aggregating approximately $6,000 to $8,000 related to the Operations and Field Realignment Plan. During the three and six months ended July 4, 2021, the Company recognized costs totaling $1,215 and $1,489, respectively, which primarily included third-party and other costs. The Company expects to incur additional costs aggregating approximately $1,000 to $3,000, 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 EndedSix Months EndedTotal
Incurred Since Inception
July 4,
2021		July 4,
2021
Severance and related employee costs$79 $333 $3,446 
Third-party and other costs1,136 1,156 1,223 
1,215 1,489 4,669 
Share-based compensation (a)— — 621 
Total operations and field realignment$1,215 $1,489 $5,290 
_______________

(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 July 4, 2021.
Balance
January 3, 2021		ChargesPaymentsBalance
July 4,
2021
Severance and related employee costs$2,600 $333 $(1,924)$1,009 
Third-party and other costs— 1,156 (1,156)— 
$2,600 $1,489 $(3,080)$1,009 

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, enabling 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 and six months ended June 28, 2020, the Company recognized costs totaling $2,847 and $6,406, which primarily included third-party and other costs and severance and related employee 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 EndedSix Months EndedTotal
Incurred Since Inception
July 4,
2021		June 28,
2020		July 4,
2021		June 28,
2020
Severance and related employee costs (a)$(8)$830 $(119)$975 $8,272 
Recruitment and relocation costs13 143 121 314 1,417 
Third-party and other costs1 1,874 4 5,117 6,539 
6 2,847 6 6,406 16,228 
Share-based compensation (b)— — — — 193 
Total IT realignment $6 $2,847 $6 $6,406 $16,421 
_______________

(a)The three and six months ended July 4, 2021 include 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 $462 and $10 as of July 4, 2021 and $4,039 and $371 as of June 28, 2020, respectively. The tables below present a rollforward of our accruals for the IT Realignment Plan.
Balance
January 3, 2021		ChargesPaymentsBalance
July 4,
2021
Severance and related employee costs$1,508 $(119)$(917)$472 
Recruitment and relocation costs— 121 (121)— 
Third-party and other costs— 4 (4)— 
$1,508 $6 $(1,042)$472 
Balance
December 29, 2019		ChargesPaymentsBalance
June 28,
2020
Severance and related employee costs$7,548 $975 $(4,113)$4,410 
Recruitment and relocation costs— 314 (314)— 
Third-party and other costs1,076 5,117 (6,193)— 
$8,624 $6,406 $(10,620)$4,410 

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 six months ended June 28, 2020, the Company recognized costs totaling $331, which primarily included share-based compensation and severance and related employee costs. 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 EndedSix Months EndedTotal
Incurred Since Inception
July 4,
2021		June 28,
2020		July 4,
2021		June 28,
2020
Severance and related employee costs (a)$(22)$(6)$(53)$146 $24,213 
Recruitment and relocation costs(1)— — 15 2,876 
Third-party and other costs(1)— — 1 2,223 
(24)(6)(53)162 29,312 
Share-based compensation (b)8 70 19 169 8,130 
Termination of defined benefit plans— — — — 1,335 
Total G&A realignment$(16)$64 $(34)$331 $38,777 
_______________

(a)The three and six months ended July 4, 2021 and June 28, 2020 include 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 July 4, 2021, the accruals for the G&A realignment plan are included in “Accrued expenses and other current liabilities.” As of June 28, 2020, the accruals for the G&A realignment plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled and $2,705 and $108, respectively. The tables below present a rollforward of our accruals for the G&A Realignment Plan.
Balance
January 3,
2021		ChargesPaymentsBalance
July 4,
2021
Severance and related employee costs$932 $(53)$(738)$141 
Recruitment and relocation costs— — — — 
Third-party and other costs— — — — 
$932 $(53)$(738)$141 
Balance
December 29,
2019		ChargesPaymentsBalance
June 28,
2020
Severance and related employee costs$5,276 $146 $(2,671)$2,751 
Recruitment and relocation costs83 15 (36)62 
Third-party and other costs— 1 (1)— 
$5,359 $162 $(2,708)$2,813 

System Optimization Initiative

The Company recognizes costs related to acquisitions and dispositions under its system optimization initiative. During the six months ended July 4, 2021, the Company recognized costs totaling $5,575, 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 $1,000 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 EndedSix Months EndedTotal
Incurred Since Inception
July 4,
2021		June 28,
2020		July 4,
2021		June 28,
2020
Severance and related employee costs$661 $— $661 $— $18,898 
Professional fees504 — 739 80 22,846 
Other (a)— — 1,354 4 7,207 
1,165 — 2,754 84 48,951 
Accelerated depreciation and amortization (b)— — — — 25,398 
NPC lease termination costs (c)(268)— 2,821 — 2,821 
Share-based compensation (d)— — — — 5,013 
Total system optimization initiative$897 $— $5,575 $84 $82,183 
_______________

(a)The six months ended July 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 six months ended July 4, 2021 includes the write-off of lease assets of $1,341 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 were included in “Accrued expenses and other current liabilities” as of January 3, 2021.
Balance
January 3,
2021		ChargesPaymentsBalance
July 4,
2021
Severance and related employee costs$— $661 $(661)$— 
Professional fees1,230 739 (1,969)— 
Other— 1,354 (1,354)— 
$1,230 $2,754 $(3,984)$—