7. Acquisitions and Divestitures

Acquisitions

There were no significant acquisitions in 2017. We acquired restaurants from our domestic franchisees in 2016 and 2015, which are summarized as follows:


	2016		2015
Number of restaurants acquired	25		7

Location of restaurants acquired	Florida, Alabama		North Carolina
	Georgia, Texas		Missouri and
	and Kentucky		Colorado

Purchase price (in thousands):
Cash payment	$	13,352	$	922
Cancellation of accounts and notes receivable		406		—
Total purchase price	$	13,758	$	922

Final fair value allocation of purchase price (in thousands):
Property and equipment	$	1,362	$	648
Franchise rights		2,092		113
Goodwill		10,166		152
Other		138		9
Total purchase price	$	13,758	$	922

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.

Divestitures

In September 2015, the Company decided to refranchise the China Company-owned market and is planning a sale of its existing China operations, consisting of 35 Company-owned restaurants and a commissary. At that time, we classified the assets as held for sale within the consolidated balance sheet. In 2017, based on the intent to divest all assets and liabilities, we have classified the liabilities as held for sale within the consolidated balance sheet. The Company expects to sell the business during 2018; upon completion of the sale, the Company will not have any Company-owned international restaurants. In both 2017 and 2016, we recorded impairment of $1.7 million and $1.4 million, respectively, as we determined that the fair value was less than the carrying value of the associated assets, including the related goodwill. This amount is included in the refranchising and impairment gains/(losses), net in the consolidated statements of income. See Note 5 for additional information on the determination of fair value on the assets held for sale.

The following summarizes the associated assets and liabilities that are classified as held for sale (in thousands):



		December 31, 2017		December 25, 2016
Cash	$	908	$	—
Inventories		505		621
Prepaid expenses		570		517
Net property and equipment		4,878		4,767
Other assets		946		568
Valuation allowance		(1,674)		(216)
Total assets held for sale	$	6,133	$	6,257

Accounts payable	$	1,817	$	—
Accrued and other liabilities		470		—
Total liabilities held for sale	$	2,287	$	—

Subsequent to the year ended December 31, 2017, the Company entered into an Asset Purchase Agreement to refranchise 31 stores owned through a joint venture in the Denver, Colorado market for a sale price of $4.5 million. The Company holds a 60% ownership share in the stores being refranchised. We do not expect the divestiture to result in a significant refranchising gain or loss. The divestiture was effective February 26, 2018.