Asset Impairments

6 Months Ended

Jun. 27, 2011

Asset Impairments

Asset Impairments

Note 4 — Asset Impairments

In accordance with FASB Accounting Standards Codification Topic 360 (ASC Topic 360), Property, Plant & Equipment, we evaluate possible impairments at the individual restaurant level periodically and record an impairment loss whenever we determine impairment factors are present. We consider a history of poor financial operating performance to be the primary indicator of potential impairment for individual restaurant locations. We determine whether a restaurant location is impaired based on expected undiscounted cash flows, generally for the remainder of the lease term, and then determine the impairment charge based on discounted cash flows for the same period.

Restaurants are not considered for impairment during the period before they enter the comparable restaurant base, unless specific circumstances warrant otherwise.

In the three and six-month periods ended June 27, 2011, we recorded an asset impairment charge of approximately $0.1 million related to one underperforming restaurant. We recorded an asset impairment charge of approximately $0.2 million related to two underperforming restaurants during the three and six-month periods ended June 28, 2010.