Strategic Corporate Reorganization for Long-term Growth

12 Months Ended

Dec. 25, 2022

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, UK, 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 $13.1 million and $6.0 million through December 26, 2021 and December 27, 2020, respectively, as detailed in the table below (in thousands). There were no additional corporate reorganization costs incurred during the year ended December 25, 2022.

	December 26, 2021		December 27, 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

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.

As of December 26, 2021, the estimate of unpaid strategic corporate reorganization costs was included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. The following tables summarize the activity for the years ended December 25, 2022 and December 26, 2021, respectively (in thousands):

	Balance at December 26, 2021		Charges		Payments		Balance at December 25, 2022
Employee severance and other employee transition costs	$	2,122	$	—	$	(2,122)	$	—
Recruiting and professional fees	92		—		(92)		—
Relocation costs	740		—		(740)		—
Total strategic corporate reorganization liability	$	2,954	$	—	$	(2,954)	$	—

	Balance at December 27, 2020		Charges		Payments		Balance at December 26, 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