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Facilities Action Charges (Income), Net
 9 Months Ended
Sep. 28, 2014
Restructuring and Related Activities [Abstract]  
Restructuring and Related Activities Disclosure
Facilities Action Charges (Income), Net
 
Three Months Ended
 
Nine Months Ended
 
September 28,
2014
 
September 29,
2013
 
September 28,
2014
 
September 29,
2013
System optimization initiative
$
7,520

 
$
21,557

 
$
(35,630
)
 
$
26,356

Facilities relocation and other transition costs
—

 
632

 
—

 
3,956

Breakfast discontinuation
—

 
86

 
—

 
1,115

Arby’s transaction related costs
—

 
—

 
—

 
263

 
$
7,520

 
$
22,275

 
$
(35,630
)
 
$
31,690



System Optimization Initiative

In August 2014, the Company announced a plan to sell all of its company-owned restaurants in Canada to franchisees by the end of the first quarter of 2015 as part of its ongoing system optimization initiative. During the third quarter of 2014, the Company completed the sale of two Canadian restaurants and classified its remaining Canadian restaurants’ assets as held for sale.
During the first quarter of 2014, the Company completed the sale of 174 company-owned restaurants in the U.S. to franchisees, bringing the aggregate total to 418 during 2013 and 2014 under its system optimization initiative announced in July 2013. This initiative also included the consolidation of regional and divisional territories which was substantially completed by the end of the second quarter of 2014.
As a result of the system optimization initiative, the Company has recorded losses on remeasuring long-lived assets to fair value upon determination that the assets will be leased and/or subleased to franchisees in connection with the sale of restaurants (“System Optimization Remeasurement”). In addition, the Company has recognized costs related to the system optimization initiative which are illustrated in the table below. These costs have been substantially offset by net gains recognized on sales of restaurants, all of which are recorded to “Facilities action charges (income), net” in our condensed consolidated statements of operations.
The Company anticipates recognizing additional system optimization related costs through the first quarter of 2015 of between $2,000 and $4,000 which include severance and related employee costs and professional fees. The Company is unable to estimate any gains or losses resulting from future sales of its Canadian restaurants. The Company plans to retain its ownership in a Canadian restaurant real estate joint venture with Tim Hortons Inc. For additional information on the joint venture see Note 4.

The following is a summary of the activity recorded under our system optimization initiative:
 
Three Months Ended
 
Nine Months Ended
 
Total Incurred Since Inception
 
September 28,
2014
 
September 29,
2013
 
September 28,
2014
 
September 29,
2013
 
Loss (gain) on sales of restaurants, net
$
921

 
$
(1,665
)
 
$
(60,490
)
 
$
(2,941
)
 
$
(107,157
)
System Optimization Remeasurement (a)
5,210

 
12,421

 
7,484

 
18,359

 
27,990

Accelerated amortization (b)
—

 
3,130

 
475

 
3,130

 
17,382

Severance and related employee costs
715

 
6,131

 
6,641

 
6,131

 
16,291

Professional fees
38

 
704

 
3,227

 
829

 
5,616

Share-based compensation (c)
125

 
755

 
3,760

 
755

 
5,013

Other
511

 
81

 
3,273

 
93

 
4,136

Total system optimization initiative
$
7,520

 
$
21,557

 
$
(35,630
)
 
$
26,356

 
$
(30,729
)
_______________

(a)
Includes remeasurement of land, buildings, leasehold improvements and favorable lease assets at company-owned restaurants included in our system optimization initiative. See Note 5 for more information on non-recurring fair value measurements.

(b)
Includes accelerated amortization of previously acquired franchise rights related to company-owned restaurants in territories that were sold in connection with our system optimization initiative.

(c)
Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative.

(Loss) Gain on Sales of Restaurants, Net
 
Three Months Ended
 
Nine Months Ended
 
September 28,
2014
 
September 29,
2013
 
September 28,
2014
 
September 29,
2013
Number of restaurants sold to franchisees
2

 
53

 
176

 
61

 
 
 
 
 
 
 
 
Proceeds from sales of restaurants
$
62

 
$
22,871

 
$
95,053

 
$
25,671

Net assets sold (a)
(132
)
 
(13,646
)
 
(41,351
)
 
(14,489
)
Goodwill related to sales of restaurants
(10
)
 
(5,621
)
 
(12,653
)
 
(6,302
)
Net (unfavorable) favorable lease (liabilities)/assets (b)
(420
)
 
(1,884
)
 
20,501

 
(1,884
)
Other
—

 
(22
)
 
478

 
(22
)
 
(500
)
 
1,698

 
62,028

 
2,974

Post-closing adjustments on sales of restaurants
(421
)
 
(33
)
 
(1,538
)
 
(33
)
(Loss) gain on sales of restaurants, net
$
(921
)
 
$
1,665

 
$
60,490

 
$
2,941

_______________

(a)
Net assets sold consisted primarily of cash, inventory and equipment.

(b)
During the three and nine months ended September 28, 2014, the Company recorded favorable lease assets of $164 and $43,496, respectively, and unfavorable lease liabilities of $584 and $22,995, respectively, as a result of leasing and/or subleasing land, buildings, and/or leasehold improvements to franchisees, in connection with sales of restaurants. During the three and nine months ended September 29, 2013, the Company recorded favorable lease assets of $8,789 and unfavorable lease liabilities of $10,673.

The table below presents a rollforward of our accrual for the system optimization initiative, which is included in “Accrued expenses and other current liabilities.”
 
Balance
December 29, 2013
 
Charges
 
Payments
 
Balance
September 28,
2014
Severance and related employee costs
$
7,051

 
$
6,641

 
$
(10,898
)
 
$
2,794

Professional fees
137

 
3,227

 
(3,226
)
 
138

Other
260

 
3,273

 
(2,382
)
 
1,151

 
$
7,448

 
$
13,141

 
$
(16,506
)
 
$
4,083



Assets Held for Sale
 
September 28, 2014
 
December 29, 2013
Number of restaurants classified as held for sale
134

 
181

 
 
 
 
Net assets held for sale
$
28,317

 
$
29,630



In August 2014, the Company determined that all of its company-owned restaurants in Canada, which are part of the system optimization initiative, met the criteria to be classified as held for sale. Net assets held for sale consist primarily of cash, inventory, equipment and an estimate of allocable goodwill and are included in “Prepaid expenses and other current assets.”



Facilities Relocation and Other Transition Costs

As announced in December 2011, we commenced the relocation of the Company’s Atlanta restaurant support center to Ohio, which was substantially completed during 2012. The Company incurred $632 and $3,956 of expense during the three and nine months ended September 29, 2013, respectively, and $39,091 since inception. The Company did not incur any expenses during the nine months ended September 28, 2014 and does not expect to incur additional costs related to the relocation.