Strategic Corporate Reorganization for Long-term Growth

12 Months Ended

Dec. 26, 2021

Strategic Corporate Reorganization for Long-term Growth

Strategic Corporate Reorganization for Long-term Growth

16. Strategic Corporate Reorganization for Long-term Growth

On September 17, 2020, we announced plans to open an office in Atlanta, Georgia located in Three Ballpark Center at The Battery Atlanta, which opened in October 2021. The space is designed to drive continued menu innovation and optimize integration across marketing, communications, customer experience, operations, human resources, diversity, equity and inclusion, financial planning and analysis, investor relations and development functions. Our information technology, finance, supply chain, and legal teams continue to operate in our Louisville, Kentucky office, which remains critical to our success. We also maintain an office outside of London, United Kingdom, where our international operations are managed. Employees whose positions were relocated to the new Atlanta office were either offered an opportunity to continue with the organization or were offered a severance package. As a result, we incurred one-time corporate reorganization costs of approximately $19.1 million through December 26, 2021 which include $10.2 million of employee severance and other employee transition costs, $5.4 million of recruiting and professional fees, $3.4 million of relocation costs, and $1.0 million of other costs, offset by ($0.9) million of stock-based compensation forfeitures on unvested awards.

We record severance as a one-time termination benefit and recognize the expense ratably over the employees’ required future service period. All other costs, including employee transition costs, recruitment and relocation costs, and third-party costs, are recognized in the period incurred. All strategic corporate reorganization costs have been recorded in General and administrative expenses on the Consolidated Statement of Operations.

Strategic corporate reorganization costs recorded for the years ended December 26, 2021 and December 27, 2020, respectively, are as follows:

	Year Ended		Year Ended
	Dec. 26,		Dec. 27,
(in thousands)	2021		2020
Employee severance and other employee transition costs	$	5,429	$	4,775
Recruiting and professional fees		3,815		1,598
Relocation costs		3,100		267
Other costs		750		285
Total strategic corporate reorganization costs	$	13,094	$	6,925
Stock-based compensation forfeitures on unvested awards		—		(940)
Total strategic corporate reorganization costs, net of stock forfeitures	$	13,094	$	5,985

As of December 26, 2021 and December 27, 2020, the estimate of unpaid strategic corporate reorganization costs are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.  The following tables summarizes the activity for the years ended December 26, 2021 and December 27, 2020, respectively:

	Balance at						Balance at
	Dec. 27						Dec. 26,
(in thousands)	2020		Charges		Payments		2021
Employee severance and other employee transition costs	$	4,615	$	5,429	$	(7,922)	$	2,122
Recruiting and professional fees		145		3,815		(3,868)		92
Relocation costs		101		3,100		(2,461)		740
Other costs		—		750		(750)		—
Total strategic corporate reorganization liability	$	4,861	$	13,094	$	(15,001)	$	2,954
	Balance at						Balance at
	Dec. 29						Dec. 27
(in thousands)	2019		Charges		Payments		2020
Employee severance and other employee transition costs	$	—	$	4,775	$	(160)	$	4,615
Recruiting and professional fees		—		1,598		(1,453)		145
Relocation costs		—		267		(166)		101
Other costs		—		285		(285)		—
Total strategic corporate reorganization liability	$	—	$	6,925	$	(2,064)	$	4,861