Fair Value Measurement

12 Months Ended

Jan. 03, 2012

Fair Value Measurement [Abstract]

Fair Value Measurement

13. FAIR VALUE MEASUREMENT

Financial Assets and Liabilities

The carrying value of the Company's cash and cash equivalents accounts receivable and accounts payable approximate fair value because of their short-term nature. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1: Quoted prices are available in active markets for identical assets or liabilities.

Level 2: Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable.

Level 3: Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions that market participants would use in pricing.

The following table presents financial assets that were accounted for at fair value on a recurring basis as of January 3, 2012 and December 28, 2010 by level within the fair value hierarchy (in thousands):

	Level 1		Level 2		Level 3
January 3, 2012
Assets:
Cash invested in money market fund(1)	$	1,352	$	—	$	—
December 28, 2010
Assets:
Cash invested in money market fund(1)	$	1,825	$	—	$	—

⁽¹⁾  Included in restricted cash on the consolidated balance sheet.

Non-financial Assets and Liabilities

The Company's non-financial assets and liabilities primarily consist of long-lived assets, trademarks and other intangibles, and are reported at carrying value. They are not required to be measured at fair value on a recurring basis. The Company evaluates long-lived assets for impairment when facts and circumstances indicate that their carrying values may not be recoverable. Trademarks and other intangibles are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

The following table presents assets that were accounted for at fair value on a non-recurring basis and remaining on the consolidated balance sheets as of January 3, 2012 and December 28, 2010. Total losses include losses recognized from all non-recurring fair value measurements for the fiscal years ended January 3, 2012 and December 28, 2010 (in thousands):

	Level 1		Level 2		Level 3
January 3, 2012
Assets:
Assets held for sale	$	—	$	—	$	—
Long-lived assets(1)		—		—		5,575
Total losses recognized for the fiscal year ended January 3, 2012		—		—		1,291
December 28, 2010
Assets:
Assets held for sale		—		—	$	3,877
Long-lived assets(1)		—		—		6,531
Total losses recognized for the fiscal year ended December 28, 2010		—		—		2,778

⁽¹⁾  Included in property, fixtures and equipment, net on the consolidated balance sheet.

For assets that are measured using quoted prices in active markets, fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. The Company invested cash in money market funds and active exchange funds of $1.4 million and $1.8 million as of January 3, 2012 and December 28, 2010, respectively.

Assets held for sale consisted of Company Stores that the Company expected to refranchise. Such assets were recorded at the lower of the carrying amount or fair value less cost to sell. Fair value was determined based on the purchase price in the asset purchase agreement.