Acquisitions

12 Months Ended

Dec. 28, 2014

Acquisitions

Acquisitions

7.  Acquisitions

We acquired restaurants from our domestic franchisees in 2014 and 2012 (none in 2013), which are summarized as follows:

	2014		2012
Number of restaurants acquired	13		56
Location of restaurants acquired	Various		Denver and Minneapolis
Purchase price (in thousands):
Cash payment (a)	$	4,773	$	5,200
Cancellation of accounts and notes receivable	412		—
Total purchase price	$	5,185	$	5,200
Fair value allocation of purchase price (in thousands):
Property and equipment	$	555	$	1,602
Reacquired franchise right	844		245
Goodwill	3,661		3,830
Other, including cash	125		239
Total purchase price	$	5,185	$	5,916

(a) 2012 cash payments made were net of $700,000 received from the sale of six restaurants located in the Denver market to an existing franchisee.

The restaurant acquisitions described above were accounted for by the purchase method of accounting, whereby operating results subsequent to the acquisition date are included in our consolidated financial results. The excess of the purchase price over the aggregate fair value of net assets acquired was allocated to goodwill for the Domestic Company-owned restaurants segment and is eligible for deduction over 15 years under U.S. tax regulations.

In July 2012, Papa John’s and a third party formed a limited liability company (PJ Minnesota, LLC) to operate the previously acquired Minneapolis restaurants. The Company’s equity (80% ownership at that time) in the operations was funded by the contribution of the acquired restaurants, while the third party’s equity (20% ownership at that time) was funded through a $275,000 loan issued by Papa John’s and a $25,000 cash contribution. There was no gain or loss on this transaction. We are required to fully consolidate the financial results of this limited liability company. See Note 6 for additional information.

In September 2012, Papa John’s and a third party formed a limited liability company (PJ Denver, LLC) to operate the previously acquired Denver restaurants. The Company’s equity (60% ownership) in the operations was funded by the contribution of the acquired restaurants and cash (total value of $2.5 million), while the third party’s equity (40% ownership) was funded by a cash contribution of $1.7 million. There was no gain or loss on this transaction. We are required to fully consolidate the financial results of this limited liability company. See Note 6 for additional information.