System Optimization Gains, Net (Tables)

9 Months Ended

Oct. 03, 2021

System optimization gains, net

Summary of Disposition Activity

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

	Three Months Ended				Nine Months Ended
	October 3, 2021		September 27, 2020		October 3, 2021		September 27, 2020
Number of restaurants sold to franchisees	—		—		47		—
Proceeds from sales of restaurants (a)	$	—	$	—	$	50,518	$	—
Net assets sold (b)	—		—		(16,939)		—
Goodwill related to sales of restaurants	—		—		(4,847)		—
Net unfavorable leases (c)	—		—		(2,939)		—
Gain on sales-type leases	—		—		7,156		—
Other (d)	—		—		(2,148)		—
	—		—		30,801		—
Post-closing adjustments on sales of restaurants (e)	5		23		520		368
Gain on sales of restaurants, net	5		23		31,321		368
(Loss) gain on sales of other assets, net (f)	1,432		—		1,398		1,965
System optimization gains, net	$	1,437	$	23	$	32,719	$	2,333

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(a)In addition to the proceeds noted herein, the Company received cash proceeds of $26 during the three and nine months ended October 3, 2021 related to a note receivable issued in connection with the sale of the Manhattan Company-operated restaurants.

(b)Net assets sold consist primarily of equipment.

(c)During the nine months ended October 3, 2021, the Company recorded favorable lease assets of $3,799 and unfavorable lease liabilities of $6,738 as a result of leasing and/or subleasing land, buildings, and/or leasehold improvements to franchisees, in connection with the sale of the New York Company-operated restaurants (including Manhattan).

(d)The nine months ended October 3, 2021 include a deferred gain of $3,500 as a result of certain contingencies related to the extension of lease terms.

(e)The nine months ended October 3, 2021 includes the recognition of deferred gains of $515 as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees. The three and nine months ended September 27, 2020 represent the recognition of such deferred gains.

(f)During the three and nine months ended October 3, 2021, the Company received net cash proceeds of $2,100 and $2,113, respectively, primarily from the sale of surplus and other properties. During the nine months ended September 27, 2020, the Company received net cash proceeds of $3,570, primarily from the sale of surplus and other properties.

Assets Held for Sale

	October 3, 2021		January 3, 2021
Number of restaurants classified as held for sale	—		43
Net restaurant assets held for sale (a)	$	—	$	20,587
Other assets held for sale (b)	$	3,749	$	1,732

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(a)Net restaurant assets held for sale as of January 3, 2021 included New York Company-operated restaurants (excluding Manhattan) and consisted primarily of cash, inventory, property and an estimate of allocable goodwill. During the three months ended April 4, 2021, the Company also classified its four Manhattan restaurants as held for sale.

(b)Other assets held for sale primarily consist of surplus properties.