Leases

6 Months Ended

Apr. 12, 2020

Leases [Abstract]

Operating Leases, Lessee

LEASES

Nature of leases — We own restaurant sites and we also lease restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying condensed consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”

Significant assumptions and judgements — We evaluate the contracts entered into by the Company to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms.

The lease term and incremental borrowing rate for each lease requires judgement by management and can impact the classification of our leases as well as the value of our lease assets and liabilities. When determining the lease term, we consider option periods available, and include option periods in the measurement of the lease ROU asset and lease liability where the exercise is reasonably certain to occur. As our leases do not provide an implicit discount rate, we have determined it is appropriate to use our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, in calculating our lease liabilities.

Rent Concessions as Lessee

In response to the pandemic, certain landlords have agreed to temporary rent concessions. These concessions generally relate to the deferral of certain rent payments for April, May and June until future periods and total approximately $13.4 million. We considered the FASB’s recent guidance regarding rent concessions related to the effects of the COVID-19 pandemic, and have elected to apply the temporary practical expedient to account for rent concessions as though enforceable rights and obligations for those concessions existed in the lease agreements. Therefore, we will not remeasure our lease ROU assets and liabilities, and as of April 12, 2020 have bifurcated our operating lease liabilities into the portion that remains subject to accretion of $940.0 million, and the portion that is related to April rent deferrals of $4.8 million.

Rent Concessions as Lessor

We postponed collection of approximately 40% of April rents due from our franchisees totaling approximately $9.1 million, to be collected over three months beginning July 2020. Furthermore, we passed on to our franchisees approximately $10.4 million of the rent concessions secured from our landlords for April, May and June.

Company as Lessee

Leased assets and liabilities consisted of the following as of April 12, 2020 (in thousands):

	April 12, 2020
Assets:
Operating lease ROU assets	$	903,010
Finance lease ROU assets (1)	2,689
Total ROU assets	$	905,699
Liabilities:
Current operating lease liabilities	$	163,077
Current finance lease liabilities (2)	819
Long term operating lease liabilities	781,653
Long-term finance lease liabilities (2)	2,511
Total lease liabilities	$	948,060

____________________________

(1)Included in “Property and equipment, net” on our condensed consolidated balance sheet.

(2)Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our condensed consolidated balance sheet.

The following table presents the components of our lease costs (in thousands):

	Quarter		Year-to-date
	April 12, 2020		April 12, 2020
Lease costs:
Finance lease cost:
Amortization of ROU assets (1)	$	179	$	413
Interest on lease liabilities (2)	28		61
Operating lease cost (3)	43,891		102,403
Short-term lease cost (3)	102		103
Variable lease cost (3)(4)	9,316		21,823
	$	53,516	$	124,803

____________________________

(1)Included in “Depreciation and amortization” in our condensed consolidated statement of earnings.

(2)Included in “Interest expense, net” in our condensed consolidated statement of earnings.

(3)Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other”, respectively, in our condensed consolidated statement of earnings. For our closed restaurants, these costs are included in “Impairment and other, net” and all other costs are included in “Selling, general and administrative expenses”.

(4)Includes $8.6 million in the quarter and $20.2 million year-to-date of property taxes and common area maintenance costs which are reimbursed by sub-lessees.

The following table presents supplemental information related to leases:

	April 12, 2020
Weighted-average remaining lease term (in years):
Finance leases	3.6
Operating leases	8.2
Weighted-average discount rate:
Finance leases	3.5	%
Operating leases	4.0	%

The following table presents as of April 12, 2020, the annual maturities of our lease liabilities (in thousands):

	Finance Leases		Operating Leases
Fiscal year:
Remainder of 2020 (1)	$	443	$	80,592
2021 (1)	906		205,534
2022	906		158,823
2023	901		131,362
2024	408		100,021
Thereafter	54		449,077
Total future lease payments (2)	$	3,618	$	1,125,409
Less: imputed interest	(288)		(180,679)
Present value of lease liabilities	$	3,330	$	944,730

____________________________

(1)The impact of rent concessions reduced 2020 operating leases maturities by $1.3 million and increased 2021 by $6.0 million.

(2)Total future lease payments include non-cancellable commitments of $3.6 million for finance leases and $1,090 million for operating leases.

The following table presents as of September 29, 2019, future minimum lease payments for non-cancellable leases (in thousands):

	Capital Leases		Operating Leases
Fiscal year:
2020	$	879	$	193,313
2021	879		186,226
2022	879		145,794
2023	864		117,753
2024	396		87,420
Thereafter	40		363,505
Total minimum lease payments	$	3,937	$	1,094,011
Less: imputed interest	(343)
Present value of lease liability	$	3,594

The following table includes supplemental cash flow and non-cash information related to our lessee leases (in thousands):

	Year-to-date
	April 12, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	115,376
Operating cash flows from financing leases	$	61
Financing cash flows from financing leases	$	390
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	105,748
Financing leases	$	132

Sale leaseback transactions — In the first quarter of 2020, we completed a sale leaseback transaction of a multi-tenant commercial property in Los Angeles, California and leased back the parcel on which a company-operated restaurant is located. The Company received net proceeds of $17.4 million and recognized a $0.2 million loss on the sale. The initial term on the lease is 20 years and the lease has been accounted for as an operating lease.

In the first quarter of 2020, we completed the sale of one of our corporate office buildings as we move forward with our previously announced consolidation of our headquarters. We entered into a lease with the buyer to leaseback the property for up to 18 months with an option to terminate earlier without penalty, upon providing a 90-day notice. The net proceeds received on the sale was $20.6 million and the lease has been accounted for as an operating lease. A gain on the sale of $10.8 million was recognized, and is presented within “Impairment and other charges, net” in our condensed consolidated statement of earnings.

Company as Lessor

The following table presents rental income (in thousands):

	Quarter						Year-to-date
	April 12, 2020						April 12, 2020
	Owned Properties		Leased Properties		Total		Owned Properties		Leased Properties		Total
Operating lease income - franchise	$	4,572	$	50,123	$	54,695	$	10,667	$	116,692	$	127,359
Variable lease income - franchise	1,810		13,380		15,190		4,526		34,084		38,610
Franchise rental revenues	$	6,382	$	63,503	$	69,885	$	15,193	$	150,776	$	165,969
Operating lease income - closed restaurants and other (1)	$	—	$	1,470	$	1,470	$	—	$	3,527	$	3,527

____________________________

(1)Primarily relates to closed restaurant properties included in “Impairment and other, net” in our condensed consolidated statement of earnings.

The following table presents as of April 12, 2020, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

	April 12, 2020
Fiscal year:
Remainder of 2020 (1)(2)	$	106,892
2021 (2)	261,492
2022	232,748
2023	226,178
2024	201,003
Thereafter	1,250,834
Total minimum rental receipts	$	2,279,147

____________________________

(1)Includes $9.1 million of postponed April rents to be repaid over three months beginning July 2020.

(2)The impact of rent concessions passed on to franchisees reduced 2020 by $1.7 million and increased 2021 by $4.7 million.

The following table presents as of September 29, 2019, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

	September 29, 2019
Fiscal year:
2020	$	239,219
2021	255,315
2022	231,394
2023	224,605
2024	199,442
Thereafter	1,215,811
Total minimum rental receipts	$	2,365,786

Finance Leases, Lessee

LEASES

Nature of leases — We own restaurant sites and we also lease restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying condensed consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”

Significant assumptions and judgements — We evaluate the contracts entered into by the Company to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms.

The lease term and incremental borrowing rate for each lease requires judgement by management and can impact the classification of our leases as well as the value of our lease assets and liabilities. When determining the lease term, we consider option periods available, and include option periods in the measurement of the lease ROU asset and lease liability where the exercise is reasonably certain to occur. As our leases do not provide an implicit discount rate, we have determined it is appropriate to use our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, in calculating our lease liabilities.

Rent Concessions as Lessee

In response to the pandemic, certain landlords have agreed to temporary rent concessions. These concessions generally relate to the deferral of certain rent payments for April, May and June until future periods and total approximately $13.4 million. We considered the FASB’s recent guidance regarding rent concessions related to the effects of the COVID-19 pandemic, and have elected to apply the temporary practical expedient to account for rent concessions as though enforceable rights and obligations for those concessions existed in the lease agreements. Therefore, we will not remeasure our lease ROU assets and liabilities, and as of April 12, 2020 have bifurcated our operating lease liabilities into the portion that remains subject to accretion of $940.0 million, and the portion that is related to April rent deferrals of $4.8 million.

Rent Concessions as Lessor

We postponed collection of approximately 40% of April rents due from our franchisees totaling approximately $9.1 million, to be collected over three months beginning July 2020. Furthermore, we passed on to our franchisees approximately $10.4 million of the rent concessions secured from our landlords for April, May and June.

Company as Lessee

Leased assets and liabilities consisted of the following as of April 12, 2020 (in thousands):

	April 12, 2020
Assets:
Operating lease ROU assets	$	903,010
Finance lease ROU assets (1)	2,689
Total ROU assets	$	905,699
Liabilities:
Current operating lease liabilities	$	163,077
Current finance lease liabilities (2)	819
Long term operating lease liabilities	781,653
Long-term finance lease liabilities (2)	2,511
Total lease liabilities	$	948,060

____________________________

(1)Included in “Property and equipment, net” on our condensed consolidated balance sheet.

(2)Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our condensed consolidated balance sheet.

The following table presents the components of our lease costs (in thousands):

	Quarter		Year-to-date
	April 12, 2020		April 12, 2020
Lease costs:
Finance lease cost:
Amortization of ROU assets (1)	$	179	$	413
Interest on lease liabilities (2)	28		61
Operating lease cost (3)	43,891		102,403
Short-term lease cost (3)	102		103
Variable lease cost (3)(4)	9,316		21,823
	$	53,516	$	124,803

____________________________

(1)Included in “Depreciation and amortization” in our condensed consolidated statement of earnings.

(2)Included in “Interest expense, net” in our condensed consolidated statement of earnings.

(3)Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other”, respectively, in our condensed consolidated statement of earnings. For our closed restaurants, these costs are included in “Impairment and other, net” and all other costs are included in “Selling, general and administrative expenses”.

(4)Includes $8.6 million in the quarter and $20.2 million year-to-date of property taxes and common area maintenance costs which are reimbursed by sub-lessees.

The following table presents supplemental information related to leases:

	April 12, 2020
Weighted-average remaining lease term (in years):
Finance leases	3.6
Operating leases	8.2
Weighted-average discount rate:
Finance leases	3.5	%
Operating leases	4.0	%

The following table presents as of April 12, 2020, the annual maturities of our lease liabilities (in thousands):

	Finance Leases		Operating Leases
Fiscal year:
Remainder of 2020 (1)	$	443	$	80,592
2021 (1)	906		205,534
2022	906		158,823
2023	901		131,362
2024	408		100,021
Thereafter	54		449,077
Total future lease payments (2)	$	3,618	$	1,125,409
Less: imputed interest	(288)		(180,679)
Present value of lease liabilities	$	3,330	$	944,730

____________________________

(1)The impact of rent concessions reduced 2020 operating leases maturities by $1.3 million and increased 2021 by $6.0 million.

(2)Total future lease payments include non-cancellable commitments of $3.6 million for finance leases and $1,090 million for operating leases.

The following table presents as of September 29, 2019, future minimum lease payments for non-cancellable leases (in thousands):

	Capital Leases		Operating Leases
Fiscal year:
2020	$	879	$	193,313
2021	879		186,226
2022	879		145,794
2023	864		117,753
2024	396		87,420
Thereafter	40		363,505
Total minimum lease payments	$	3,937	$	1,094,011
Less: imputed interest	(343)
Present value of lease liability	$	3,594

The following table includes supplemental cash flow and non-cash information related to our lessee leases (in thousands):

	Year-to-date
	April 12, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	115,376
Operating cash flows from financing leases	$	61
Financing cash flows from financing leases	$	390
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	105,748
Financing leases	$	132

Sale leaseback transactions — In the first quarter of 2020, we completed a sale leaseback transaction of a multi-tenant commercial property in Los Angeles, California and leased back the parcel on which a company-operated restaurant is located. The Company received net proceeds of $17.4 million and recognized a $0.2 million loss on the sale. The initial term on the lease is 20 years and the lease has been accounted for as an operating lease.

In the first quarter of 2020, we completed the sale of one of our corporate office buildings as we move forward with our previously announced consolidation of our headquarters. We entered into a lease with the buyer to leaseback the property for up to 18 months with an option to terminate earlier without penalty, upon providing a 90-day notice. The net proceeds received on the sale was $20.6 million and the lease has been accounted for as an operating lease. A gain on the sale of $10.8 million was recognized, and is presented within “Impairment and other charges, net” in our condensed consolidated statement of earnings.

Company as Lessor

The following table presents rental income (in thousands):

	Quarter						Year-to-date
	April 12, 2020						April 12, 2020
	Owned Properties		Leased Properties		Total		Owned Properties		Leased Properties		Total
Operating lease income - franchise	$	4,572	$	50,123	$	54,695	$	10,667	$	116,692	$	127,359
Variable lease income - franchise	1,810		13,380		15,190		4,526		34,084		38,610
Franchise rental revenues	$	6,382	$	63,503	$	69,885	$	15,193	$	150,776	$	165,969
Operating lease income - closed restaurants and other (1)	$	—	$	1,470	$	1,470	$	—	$	3,527	$	3,527

____________________________

(1)Primarily relates to closed restaurant properties included in “Impairment and other, net” in our condensed consolidated statement of earnings.

The following table presents as of April 12, 2020, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

	April 12, 2020
Fiscal year:
Remainder of 2020 (1)(2)	$	106,892
2021 (2)	261,492
2022	232,748
2023	226,178
2024	201,003
Thereafter	1,250,834
Total minimum rental receipts	$	2,279,147

____________________________

(1)Includes $9.1 million of postponed April rents to be repaid over three months beginning July 2020.

(2)The impact of rent concessions passed on to franchisees reduced 2020 by $1.7 million and increased 2021 by $4.7 million.

The following table presents as of September 29, 2019, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

	September 29, 2019
Fiscal year:
2020	$	239,219
2021	255,315
2022	231,394
2023	224,605
2024	199,442
Thereafter	1,215,811
Total minimum rental receipts	$	2,365,786

Operating Leases, Lessor

LEASES

Nature of leases — We own restaurant sites and we also lease restaurant sites from third parties. Some of these owned or leased sites are leased and/or subleased to franchisees. Initial terms of our real estate leases are generally 20 years, exclusive of options to renew, which are generally exercisable at our sole discretion for 1 to 20 years. In some instances, our leases have provisions for contingent rentals based upon a percentage of defined revenues. Many of our restaurants also have rent escalation clauses and require the payment of property taxes, insurance, and maintenance costs. Variable lease costs include contingent rent, cost-of-living index adjustments, and payments for additional rent such as real estate taxes, insurance and common area maintenance, which are excluded from the measurement of the lease liability. We also lease certain restaurant and office equipment with initial terms generally ranging from 3 to 8 years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As lessor, our leases and subleases primarily consist of restaurants that have been leased to franchisees subsequent to refranchising transactions. The lease descriptions, terms, variable lease payments and renewal options are generally the same as the lessee leases described above. Revenues from leasing arrangements with our franchisees are presented in “Franchise rental revenues” in the accompanying condensed consolidated statements of earnings, and the related expenses are presented in “Franchise occupancy expenses.”

Significant assumptions and judgements — We evaluate the contracts entered into by the Company to determine whether such contracts contain leases. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee, or as an operating, sales-type or direct financing lease where the Company is a lessor, based on their terms.

The lease term and incremental borrowing rate for each lease requires judgement by management and can impact the classification of our leases as well as the value of our lease assets and liabilities. When determining the lease term, we consider option periods available, and include option periods in the measurement of the lease ROU asset and lease liability where the exercise is reasonably certain to occur. As our leases do not provide an implicit discount rate, we have determined it is appropriate to use our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, in calculating our lease liabilities.

Rent Concessions as Lessee

In response to the pandemic, certain landlords have agreed to temporary rent concessions. These concessions generally relate to the deferral of certain rent payments for April, May and June until future periods and total approximately $13.4 million. We considered the FASB’s recent guidance regarding rent concessions related to the effects of the COVID-19 pandemic, and have elected to apply the temporary practical expedient to account for rent concessions as though enforceable rights and obligations for those concessions existed in the lease agreements. Therefore, we will not remeasure our lease ROU assets and liabilities, and as of April 12, 2020 have bifurcated our operating lease liabilities into the portion that remains subject to accretion of $940.0 million, and the portion that is related to April rent deferrals of $4.8 million.

Rent Concessions as Lessor

We postponed collection of approximately 40% of April rents due from our franchisees totaling approximately $9.1 million, to be collected over three months beginning July 2020. Furthermore, we passed on to our franchisees approximately $10.4 million of the rent concessions secured from our landlords for April, May and June.

Company as Lessee

Leased assets and liabilities consisted of the following as of April 12, 2020 (in thousands):

	April 12, 2020
Assets:
Operating lease ROU assets	$	903,010
Finance lease ROU assets (1)	2,689
Total ROU assets	$	905,699
Liabilities:
Current operating lease liabilities	$	163,077
Current finance lease liabilities (2)	819
Long term operating lease liabilities	781,653
Long-term finance lease liabilities (2)	2,511
Total lease liabilities	$	948,060

____________________________

(1)Included in “Property and equipment, net” on our condensed consolidated balance sheet.

(2)Included in “Current maturities of long-term debt” and “Long-term debt, net of current maturities” on our condensed consolidated balance sheet.

The following table presents the components of our lease costs (in thousands):

	Quarter		Year-to-date
	April 12, 2020		April 12, 2020
Lease costs:
Finance lease cost:
Amortization of ROU assets (1)	$	179	$	413
Interest on lease liabilities (2)	28		61
Operating lease cost (3)	43,891		102,403
Short-term lease cost (3)	102		103
Variable lease cost (3)(4)	9,316		21,823
	$	53,516	$	124,803

____________________________

(1)Included in “Depreciation and amortization” in our condensed consolidated statement of earnings.

(2)Included in “Interest expense, net” in our condensed consolidated statement of earnings.

(3)Operating lease, short-term and variable lease costs associated with franchisees and company-operated restaurants are included in “Franchise occupancy expenses” and “Occupancy and other”, respectively, in our condensed consolidated statement of earnings. For our closed restaurants, these costs are included in “Impairment and other, net” and all other costs are included in “Selling, general and administrative expenses”.

(4)Includes $8.6 million in the quarter and $20.2 million year-to-date of property taxes and common area maintenance costs which are reimbursed by sub-lessees.

The following table presents supplemental information related to leases:

	April 12, 2020
Weighted-average remaining lease term (in years):
Finance leases	3.6
Operating leases	8.2
Weighted-average discount rate:
Finance leases	3.5	%
Operating leases	4.0	%

The following table presents as of April 12, 2020, the annual maturities of our lease liabilities (in thousands):

	Finance Leases		Operating Leases
Fiscal year:
Remainder of 2020 (1)	$	443	$	80,592
2021 (1)	906		205,534
2022	906		158,823
2023	901		131,362
2024	408		100,021
Thereafter	54		449,077
Total future lease payments (2)	$	3,618	$	1,125,409
Less: imputed interest	(288)		(180,679)
Present value of lease liabilities	$	3,330	$	944,730

____________________________

(1)The impact of rent concessions reduced 2020 operating leases maturities by $1.3 million and increased 2021 by $6.0 million.

(2)Total future lease payments include non-cancellable commitments of $3.6 million for finance leases and $1,090 million for operating leases.

The following table presents as of September 29, 2019, future minimum lease payments for non-cancellable leases (in thousands):

	Capital Leases		Operating Leases
Fiscal year:
2020	$	879	$	193,313
2021	879		186,226
2022	879		145,794
2023	864		117,753
2024	396		87,420
Thereafter	40		363,505
Total minimum lease payments	$	3,937	$	1,094,011
Less: imputed interest	(343)
Present value of lease liability	$	3,594

The following table includes supplemental cash flow and non-cash information related to our lessee leases (in thousands):

	Year-to-date
	April 12, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	115,376
Operating cash flows from financing leases	$	61
Financing cash flows from financing leases	$	390
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	105,748
Financing leases	$	132

Sale leaseback transactions — In the first quarter of 2020, we completed a sale leaseback transaction of a multi-tenant commercial property in Los Angeles, California and leased back the parcel on which a company-operated restaurant is located. The Company received net proceeds of $17.4 million and recognized a $0.2 million loss on the sale. The initial term on the lease is 20 years and the lease has been accounted for as an operating lease.

In the first quarter of 2020, we completed the sale of one of our corporate office buildings as we move forward with our previously announced consolidation of our headquarters. We entered into a lease with the buyer to leaseback the property for up to 18 months with an option to terminate earlier without penalty, upon providing a 90-day notice. The net proceeds received on the sale was $20.6 million and the lease has been accounted for as an operating lease. A gain on the sale of $10.8 million was recognized, and is presented within “Impairment and other charges, net” in our condensed consolidated statement of earnings.

Company as Lessor

The following table presents rental income (in thousands):

	Quarter						Year-to-date
	April 12, 2020						April 12, 2020
	Owned Properties		Leased Properties		Total		Owned Properties		Leased Properties		Total
Operating lease income - franchise	$	4,572	$	50,123	$	54,695	$	10,667	$	116,692	$	127,359
Variable lease income - franchise	1,810		13,380		15,190		4,526		34,084		38,610
Franchise rental revenues	$	6,382	$	63,503	$	69,885	$	15,193	$	150,776	$	165,969
Operating lease income - closed restaurants and other (1)	$	—	$	1,470	$	1,470	$	—	$	3,527	$	3,527

____________________________

(1)Primarily relates to closed restaurant properties included in “Impairment and other, net” in our condensed consolidated statement of earnings.

The following table presents as of April 12, 2020, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

	April 12, 2020
Fiscal year:
Remainder of 2020 (1)(2)	$	106,892
2021 (2)	261,492
2022	232,748
2023	226,178
2024	201,003
Thereafter	1,250,834
Total minimum rental receipts	$	2,279,147

____________________________

(1)Includes $9.1 million of postponed April rents to be repaid over three months beginning July 2020.

(2)The impact of rent concessions passed on to franchisees reduced 2020 by $1.7 million and increased 2021 by $4.7 million.

The following table presents as of September 29, 2019, future minimum rental receipts for non-cancellable leases and subleases (in thousands):

	September 29, 2019
Fiscal year:
2020	$	239,219
2021	255,315
2022	231,394
2023	224,605
2024	199,442
Thereafter	1,215,811
Total minimum rental receipts	$	2,365,786