System Optimization Gains, Net (Tables)

6 Months Ended

Jul. 03, 2022

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				Six Months Ended
	July 3, 2022		July 4, 2021		July 3, 2022		July 4, 2021
Number of restaurants sold to franchisees	—		47		—		47
Proceeds from sales of restaurants (a)	$	—	$	50,518	$	—	$	50,518
Net assets sold (b)	—		(16,939)		—		(16,939)
Goodwill related to sales of restaurants	—		(4,847)		—		(4,847)
Net unfavorable leases (c)	—		(2,939)		—		(2,939)
Gain on sales-type leases	—		7,156		—		7,156
Other (d)	—		(2,148)		—		(2,148)
	—		30,801		—		30,801
Post-closing adjustments on sales of restaurants (e)	75		—		3,522		515
Gain on sales of restaurants, net	75		30,801		3,522		31,316
Gain (loss) on sales of other assets, net (f)	77		(35)		164		(34)
System optimization gains, net	$	152	$	30,766	$	3,686	$	31,282

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(a)In addition to the proceeds noted herein, the Company received cash proceeds of $63 and $158 during the three and six months ended July 3, 2022, respectively, related to a note receivable issued in connection with the sale of the Manhattan Company-operated restaurants.

(b)Net assets sold consisted primarily of equipment.

(c)During the three and six months ended July 4, 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 three and six months ended July 4, 2021 include a deferred gain of $3,500 as a result of certain contingencies related to the extension of lease terms.

(e)Represents the recognition of deferred gains as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees.

(f)During the three and six months ended July 3, 2022, the Company received net cash proceeds of $690 and $858, respectively, primarily from the sale of surplus and other properties. During the three and six months ended July 4, 2021, the Company received net cash proceeds of $10 and $13, respectively, primarily from the sale of surplus and other properties.