Divestitures

Refranchising Initiative

In February 2015, the Company announced a plan to refranchise approximately 50 to 150 Company-owned bakery-cafes. As of September 27, 2016, the Company had completed the sale of 102 Company-owned bakery-cafes.

During the thirteen weeks ended March 29, 2016, 20 Company-owned bakery-cafes that the Company concluded no longer met all of the criteria required to be classified as held for sale were reclassified to held and used at their fair value.

On May 3, 2016, the Company sold substantially all of the assets of 15 bakery-cafes in the Portland, Oregon market to an existing franchisee for a purchase price of approximately $15.2 million, which resulted in a gain on sale of approximately $0.5 million.

On September 13, 2016, Panera International Holdings, Inc., a subsidiary of Panera Bread Company, sold all of its shares of stock of Panera Bread Ltd., as successor to Panera Bread ULC, a Canadian subsidiary, to a new franchisee for a purchase price of approximately $5.0 million, with $0.5 million payable in cash and $4.5 million payable in the form of a promissory note. The promissory note bears interest at the Wall Street Journal prime rate plus 2.00 percent and is payable in equal quarterly installments over five years. As of September 27, 2016, the carrying amount of the promissory note approximates fair value as its interest rate approximates current market rates (Level 2 inputs).

The sale of Panera Bread Ltd. transferred ownership of substantially all of the assets of 12 bakery-cafes in the Ontario, Canada market to the new franchisee. The Company recorded a gain on the sale of approximately $0.2 million during the thirteen weeks ended September 27, 2016. The Company recognized a $6.1 million loss on assets held for sale related to the 12 bakery-cafes in Ontario, Canada during the thirteen weeks ended June 28, 2016. Following the close of the sale on September 13, 2016, the Panera Bread Ltd. operations are no longer being consolidated as a subsidiary in the Company's consolidated financial statements.

The Company did not classify any assets or liabilities as held for sale as of September 27, 2016. The Company classified as held for sale the assets and certain liabilities of 35 Company-owned bakery-cafes as of December 29, 2015. The Company classifies assets as held for sale and ceases depreciation of the assets when those assets meet the held for sale criteria, as defined in GAAP.

The following summarizes activity associated with the refranchising initiative recorded in the caption entitled Refranchising loss in the Consolidated Statements of Income for the periods indicated (in thousands):



	For the 13 Weeks Ended					For the 39 Weeks Ended
	September 27, 2016			September 29, 2015		September 27, 2016			September 29, 2015
Loss on assets held for sale (1)	$	—		$	1,000	$	6,112		$	8,941
Lease termination costs and impairment of long-lived assets (1)	—			—		2,858			3,837
Professional fees, severance, and other	331			596		795			946
Loss (gain) on sale of bakery-cafes (1)	(202		)	578		(693		)	(1,992		)
Refranchising loss	$	129		$	2,174	$	9,072		$	11,732


(1)	Certain of the amounts for the thirty-nine weeks ended September 27, 2016 and September 29, 2015 are included in the caption entitled Refranchising loss in the Consolidated Statements of Cash Flows as a non-cash adjustment to reconcile net income to net cash provided by operating activities.