Basis Of Presentation (Tables)

6 Months Ended

Apr. 14, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The following table summarizes the number of restaurants as of the end of each period:



	April 14, 2019	April 15, 2018
Company-operated	137	188
Franchise	2,103	2,057
Total system	2,240	2,245

Refranchisings and franchisee development — The following table summarizes the number of restaurants sold to franchisees, the number of restaurants developed by franchisees, and gains recognized in each period (dollars in thousands):



	Quarter					Year-to-date
	April 14, 2019		April 15, 2018			April 14, 2019			April 15, 2018
Restaurants sold to franchisees	—		63			—			85
New restaurants opened by franchisees	2		3			11			8

Proceeds from the sale of company-operated restaurants:
Cash (1)	$	—	$	11,253		$	133		$	16,844
Notes receivable	—		22,422			—			31,506
	—		33,675			133			48,350

Net assets sold (primarily property and equipment)	—		(9,509		)	—			(13,146		)
Goodwill related to the sale of company-operated restaurants	—		(3,807		)	(2		)	(3,960		)
Other (2)	—		(14,887		)	88			(16,832		)
Gains on the sale of company-operated restaurants	$	—	$	5,472		$	219		$	14,412

____________________________


(1)	The year-to-date amounts in 2019 and 2018 include additional proceeds of $0.1 million and $1.2 million, respectively, related to restaurants sold in prior years.


(2)	Amounts in 2018 are primarily related to an $8.8 million reduction of gains related to the modification of certain 2017 refranchising transactions. The quarter and year-to-date amounts in 2018 also include $3.7 million and $5.2 million, respectively, of costs related to franchise remodel incentives.

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

In May 2014, the FASB issued ASU 2014-09, Revenue Recognition - Revenue from Contracts with Customers (Topic 606) (“ASC 606”), which provides a comprehensive new revenue recognition model that requires an entity to recognize revenue in an amount that reflects the consideration the entity expects to receive for the transfer of promised goods or services to its customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We adopted the new standard on October 1, 2018 using the modified retrospective method, whereby the cumulative effect of this transition to applicable contracts with customers that were not completed as of October 1, 2018 was recorded as an adjustment to beginning retained earnings as of this date. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

The new revenue recognition standard did not impact our recognition of restaurant sales, rental revenues, or royalty fees from franchisees. The new pronouncement changed the way initial fees from franchisees for new restaurant openings or new franchise terms are recognized. Under the previous revenue recognition guidance, initial franchise fees were recognized as revenue at the time when a new restaurant opened or at the start of a new franchise term. In accordance with the new guidance, the initial franchise services are not distinct from the continuing rights and services offered during the term of the franchise agreement and will therefore be treated as a single performance obligation together with the continuing rights and services. As such, initial fees received will be recognized over the franchise term and any unamortized portion will be recorded as deferred revenue in our condensed consolidated balance sheet. An adjustment to opening retained earnings and a corresponding contract liability of approximately $50.3 million (of which $5.0 million was current and $45.3 million was long-term) was established on the date of adoption. A deferred tax asset of approximately $13.0 million related to this contract liability was also established on the date of adoption.

The new standard also had an impact on transactions presented net and not included in our revenues and expenses such as franchisee contributions to and expenditures from our advertising fund, and sourcing and technology fee contributions from franchisees and the related expenses. We determined that we are the principal in these arrangements, and as such, contributions to and expenditures from the advertising fund, and sourcing and technology fees and expenditures are now reported on a gross basis within our consolidated statements of earnings. While this change materially impacted our gross amount of reported revenues and expenses, the impact will be largely offsetting with no material impact to our reported net earnings. However, any annual surplus or deficit in the marketing fund will impact income from operations and net income.

The following table summarizes the impacts of adopting ASC 606 on the Company’s condensed consolidated financial statements as of and for the 12-weeks and 28-weeks ended April 14, 2019 (in thousands):



				Adjustments
	As Reported			Franchise Fees			Marketing and Sourcing Fees			Technology Support Fees			Balances without Adoption
Condensed Consolidated Statements of Earnings
12-Weeks Ended April 14, 2019
Franchise royalties and other	$	38,410		$	(972	)	$	—		$	—		$	37,438
Franchise contributions for advertising and other services	$	38,989		$	—		$	(36,956	)	$	(2,033	)	$	—
Total revenues	$	215,727		$	(972	)	$	(36,956	)	$	(2,033	)	$	175,766
Franchise advertising and other services expenses	$	40,245		$	—		$	(36,956	)	$	(3,289	)	$	—
Selling, general and administrative expenses	$	17,585		$	—		$	—		$	1,256		$	18,841
Total operating costs and expenses, net	$	168,604		$	—		$	(36,956	)	$	(2,033	)	$	129,615
Earnings from operations	$	47,123		$	(972	)	$	—		$	—		$	46,151
Earnings from continuing operations and before income taxes	$	33,504		$	(972	)	$	—		$	—		$	32,532
Income taxes	$	8,374		$	(250	)	$	—		$	—		$	8,124
Earnings from continuing operations	$	25,130		$	(722	)	$	—		$	—		$	24,408
Net earnings	$	25,089		$	(722	)	$	—		$	—		$	24,367

28-Weeks Ended April 14, 2019
Franchise royalties and other	$	90,660		$	(2,065	)	$	—		$	—		$	88,595
Franchise contributions for advertising and other services	$	90,803		$	—		$	(86,053	)	$	(4,750	)	$	—
Total revenues	$	506,513		$	(2,065	)	$	(86,053	)	$	(4,750	)	$	413,645
Franchise advertising and other services expenses	$	94,515		$	—		$	(86,053	)	$	(8,462	)	$	—
Selling, general and administrative expenses	$	41,668		$	—		$	—		$	3,712		$	45,380
Total operating costs and expenses, net	$	401,066		$	—		$	(86,053	)	$	(4,750	)	$	310,263
Earnings from operations	$	105,447		$	(2,065	)	$	—		$	—		$	103,382
Earnings from continuing operations and before income taxes	$	73,998		$	(2,065	)	$	—		$	—		$	71,933
Income taxes	$	17,747		$	(532	)	$	—		$	—		$	17,215
Earnings from continuing operations	$	56,251		$	(1,533	)	$	—		$	—		$	54,718
Net earnings	$	59,187		$	(1,533	)	$	—		$	—		$	57,654

Condensed Consolidated Balance Sheet
April 14, 2019
Prepaid expenses	$	13,464		$	532		$	—		$	—		$	13,996
Total current assets	$	105,336		$	532		$	—		$	—		$	105,868
Deferred tax assets	$	73,567		$	(12,958	)	$	—		$	—		$	60,609
Other assets, net	$	207,388		$	269		$	—		$	—		$	207,657
Total other assets	$	328,188		$	(12,689	)	$	—		$	—		$	315,499
Total assets	$	832,127		$	(12,157	)	$	—		$	—		$	819,970
Accrued liabilities	$	114,393		$	(4,964	)	$	—		$	—		$	109,429
Total current liabilities	$	182,128		$	(4,964	)	$	—		$	—		$	177,164
Other long-term liabilities	$	227,649		$	(42,989	)	$	—		$	—		$	184,660
Total long-term liabilities	$	1,242,513		$	(42,989	)	$	—		$	—		$	1,199,524
Retained earnings	$	1,562,475		$	35,796		$	—		$	—		$	1,598,271
Total stockholders’ deficit	$	(592,514	)	$	35,796		$	—		$	—		$	(556,718	)
Total liabilities and stockholders’ deficit	$	832,127		$	(12,157	)	$	—		$	—		$	819,970