Franchise Rights Acquired, Goodwill and Other Intangible Assets

12 Months Ended

Dec. 30, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Franchise Rights Acquired, Goodwill and Other Intangible Assets

6.	Franchise Rights Acquired, Goodwill and Other Intangible Assets

The Company performed its annual impairment review of goodwill and other indefinite-lived intangible assets for fiscal 2017 and fiscal 2016 on May 7 and May 8, respectively. Given the ongoing challenging economic environment in Brazil and the negative performance trends and the Company’s reduced expectations regarding the future impact of its business growth strategies in the country, a triggering event in the Brazil reporting unit was identified which required the Company to perform an interim goodwill impairment analysis. Based on this interim test, the Company determined that the carrying amount of this reporting unit exceeded its fair value and therefore recorded an impairment charge of $13,323. As a result of the 2016 review, no impairment charges were recorded for the fiscal year ended December 31, 2016.

Franchise rights acquired are due to acquisitions of the Company’s franchised territories as well as the acquisition of franchise promotion agreements and other factors associated with the acquired franchise territories. For the fiscal year ended December 30, 2017, the change in the carrying value of franchise rights acquired is due to the effect of exchange rate changes.

Goodwill primarily relates to the acquisition of the Company by H.J. Heinz Company in 1978, the acquisition of WeightWatchers.com, Inc. in 2005, the acquisitions of the Company’s franchised territories, the acquisitions of the majority interest in Vigilantes do Peso Marketing Ltda. (“VPM”) and of Knowplicity, Inc., d/b/a Wello, in fiscal 2014 and the acquisition of Weilos in fiscal 2015. See Note 5 for additional information about acquisitions by the Company. For the fiscal year ended December 30, 2017, the change in the carrying amount of goodwill is due to the impairment charge of its Brazil reporting unit and the effect of exchange rate changes as follows:

	North		United		Continental
	America		Kingdom		Europe		Other			Total
Balance as of December 31, 2016	$	137,543	$	1,145	$	6,884	$	20,566		$	166,138
Goodwill impairment		0		0		0		(13,323	)		(13,323	)
Effect of exchange rate changes		2,846		108		875		(363	)		3,466
Balance as of December 30, 2017	$	140,389	$	1,253	$	7,759	$	6,880		$	156,281

Finite-lived Intangible Assets

In fiscal 2017, the Company corrected the prior year presentation of fully amortized assets that were no longer in service. Accordingly, the fiscal 2016 disclosures have been revised resulting in a reduction in the gross carrying amount and the accumulated amortization of capitalized software costs, website development costs and other by $23,375, $47,193 and $4,290, respectively. The below table reflects the carrying values of finite-lived intangible assets as of December 30, 2017 and the revised December 31, 2016 carrying values of finite-lived intangible assets:

	December 30, 2017				December 31, 2016
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Capitalized software costs	$	111,617	$	94,697	$	103,362	$	77,941
Website development costs		90,096		61,125		72,778		40,543
Trademarks		11,231		10,833		11,092		10,647
Other		3,793		3,546		3,655		3,144
Trademarks and other intangible assets	$	216,737	$	170,201	$	190,887	$	132,275
Franchise rights acquired		4,526		4,526		4,551		4,551
Total finite-lived intangible assets	$	221,263	$	174,727	$	195,438	$	136,826

Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of $36,040, $35,752 and $34,719, for the fiscal years ended December 30, 2017, December 31, 2016 and January 2, 2016, respectively. The franchise rights acquired related to the VPM acquisition were amortized ratably over a 2 year period. The franchise rights acquired related to the Miami Acquisition were amortized ratably over a 3 month period.

Estimated amortization expense of existing finite-lived intangible assets for the next five fiscal years and thereafter is as follows:

Fiscal 2018	$	25,237
Fiscal 2019	$	14,273
Fiscal 2020	$	5,949
Fiscal 2021	$	1,051
Fiscal 2022 and thereafter	$	26

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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