FRANCHISE ACQUISITIONS

4 Months Ended

Jan. 21, 2024

Business Combination and Asset Acquisition [Abstract]

FRANCHISE ACQUISITIONS

Franchise acquisitions — During the first quarter of 2024, the Company acquired 9 Del Taco franchise restaurants for $86 thousand as part of two separate transactions, and recognized related gains of $2.4 million. This amount is recorded in “Other operating expenses (income), net” in the accompanying condensed consolidated statements of earnings. For further information, see Note 8, Other operating expenses (income), net, below in the notes to the condensed consolidated financial statement. The following table summarizes the number of restaurants acquired from franchisees and the gains recognized (dollars in thousands):


	Sixteen Weeks Ended
	January 21, 2024
Restaurants acquired from Jack in the Box franchisees	—
Restaurants acquired from Del Taco franchisees	9

Purchase price (1)	$	(86)
Closing and acquisition costs	(43)
Property and equipment	3,612
Intangible assets	167
Operating lease right-of-use assets	3,211
Operating lease liabilities	(4,505)
Gain on the acquisition of franchise-operated restaurants	$	2,357

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(1)Comprised of outstanding receivables from franchisee forgiven upon acquisition.

During the first quarter of 2023, the Company did not acquire any Jack in the Box or Del Taco franchise restaurants.

We account for the acquisition of franchised restaurants using the acquisition method of accounting for business combinations. The purchase price allocations were based on fair value estimates determined using significant unobservable inputs (Level 3).