System Optimization Gains, Net (Tables)

12 Months Ended

Jan. 01, 2023


	Year End
	January 1, 2023		January 2, 2022
Land	$	371,347	$	370,742
Buildings and improvements	510,685		504,462
Leasehold improvements	422,330		422,094
Office, restaurant and transportation equipment	314,223		282,770
	1,618,585		1,580,068
Accumulated depreciation and amortization	(722,807)		(673,201)
	$	895,778	$	906,867

System Optimization

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:


	Year Ended
	2022		2021		2020
Number of restaurants sold to franchisees	1		47		1

Proceeds from sales of restaurants (a)	$	79	$	50,518	$	50
Net assets sold (b)	(141)		(16,939)		(34)
Goodwill related to sales of restaurants	—		(4,847)		—
Net unfavorable leases (c)	(360)		(2,939)		—
Gain on sales-type leases	—		7,156		—
Other (d)	6		(2,148)		—
	(416)		30,801		16
Post-closing adjustments on sales of restaurants (e) (f)	2,877		1,218		362
Gain on sales of restaurants, net	2,461		32,019		378

Gain on sales of other assets, net (g)	4,318		1,526		2,770
System optimization gains, net	$	6,779	$	33,545	$	3,148

_______________

(a)In addition to the proceeds noted herein, the Company received cash proceeds of $378 and $39 during 2022 and 2021, 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 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)2021 includes a deferred gain of $3,500 as a result of certain contingencies related to the extension of lease terms.

(e)2021 includes a gain on sales-type leases of $1,625 and the write-off of certain lease assets of $927 as a result of an amendment to lease terms in connection with a Manhattan Company-operated restaurant previously sold to a franchisee.

(f)2022, 2021 and 2020 include the recognition of deferred gains of $3,522, $515 and $368, respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees.

(g)During 2022, 2021 and 2020, the Company received cash proceeds of $7,780, $4,561 and $6,041, respectively, primarily from the sale of surplus and other properties.