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Summary of refranchising (Notes)
 6 Months Ended
Jun. 20, 2017
Other Industries [Abstract]  
Summary of Refranchising [Text Block]
Summary of Refranchising
In connection with the sale of company-operated restaurants to franchisees, the Company typically enters into several agreements, in addition to an asset purchase agreement, with franchisees including franchise and lease agreements. The Company typically sells restaurants’ inventory and equipment and retains ownership or the leasehold interest to the real estate to lease and/or sublease to the franchisee. The Company has determined that its restaurant dispositions usually represent multiple-element arrangements, and as such, the cash consideration received is allocated to the separate elements based on their relative selling price. Cash consideration generally includes up-front consideration for the sale of the restaurants and franchise fees and future cash consideration for royalties and lease payments. The Company considers the future lease payments in allocating the initial cash consideration received. The Company compares the stated rent under the lease and/or sublease agreements with comparable market rents and the Company records favorable or unfavorable lease assets/liabilities with a corresponding offset to the gain or loss on the sale of the company-operated restaurants. The cash consideration per restaurant for franchise fees is consistent with the amounts stated in the related franchise agreements which are charged for separate standalone arrangements. Therefore, the Company recognizes the franchise fees when earned. Future royalty income is also recognized in revenue as earned.
The following table summarizes the number of company-operated restaurants sold to franchisees and the related gain recognized during the twenty-four weeks ended June 20, 2017 (dollars in thousands):
 
 
24 Weeks Ended
June 20, 2017
Company-operated restaurants sold to franchisees
 
5

 
 
 
Proceeds from the sale of company-operated restaurants
 
$
2,192

Net assets sold (primarily furniture, fixtures and equipment)
 
(1,261
)
Goodwill related to the company-operated restaurants sold to franchisees
 
(247
)
Net unfavorable lease liabilities (a)
 
(548
)
Other costs
 
(5
)
Gain on sale of company-operated restaurants (b)
 
$
131