Reorganization and Realignment Costs

The following is a summary of the initiatives included in “Reorganization and realignment costs:”



	Three Months Ended				Six Months Ended
	June 28, 2015		June 29, 2014		June 28, 2015		June 29, 2014
G&A realignment	$	4,372	$	—	$	8,535	$	—
System optimization initiative	1,907		1,276		2,357		15,987
Reorganization and realignment costs	$	6,279	$	1,276	$	10,892	$	15,987

G&A Realignment

In November 2014, the Company initiated a plan to reduce its general and administrative expenses. The plan includes a realignment and reinvestment of resources to focus primarily on accelerated restaurant development and consumer-facing restaurant technology to drive long-term growth. The Company expects to achieve the majority of the expense reductions through the realignment of its U.S. field operations and savings at its Restaurant Support Center in Dublin, Ohio, which was substantially completed by the end of the second quarter of 2015. The Company recognized costs totaling $8,535 during the first six months of 2015 and $21,461 in aggregate since inception. The Company expects to incur additional costs aggregating approximately $4,500 during the remainder of 2015, comprised of recruitment and relocation costs of $3,500 for the reinvestment in resources to drive long-term growth and share-based compensation of $1,000.

The following is a summary of the activity recorded as a result of our G&A realignment plan:



	Three Months Ended		Six Months Ended		Total Incurred Since Inception
	June 28, 2015		June 28, 2015		Total Incurred Since Inception
Severance and related employee costs	$	637	$	2,619	$	14,536
Recruitment and relocation costs	514		984		1,193
Other	9		41		129
	1,160		3,644		15,858
Share-based compensation (a)	3,212		4,891		5,603
Total G&A realignment	$	4,372	$	8,535	$	21,461

_______________


(a)	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 G&A realignment plan.

The table below presents a rollforward of our accruals for our G&A realignment plan, which are included in “Accrued expenses and other current liabilities” and “Other liabilities.”



	Balance December 28, 2014		Charges		Payments			Balance June 28, 2015
Severance and related employee costs	$	11,609	$	2,619	$	(5,974	)	$	8,254
Recruitment and relocation costs	149		984		(902		)	231
Other	5		41		(46		)	—
	$	11,763	$	3,644	$	(6,922	)	$	8,485

System Optimization Initiative

The Company has recognized costs related to its system optimization initiative which includes the sale of restaurants to franchisees. In connection with reducing its ongoing company-owned restaurant ownership to approximately 5% of the total system, the Company expects to incur additional costs of approximately $11,000 in aggregate during the remainder of 2015 and 2016. Such costs are primarily comprised of accelerated amortization of previously acquired franchise rights related to company-owned restaurants in territories that will be sold to franchisees of approximately $7,000 and professional fees of approximately $4,000.

The following is a summary of the costs recorded as a result of our system optimization initiative:



	Three Months Ended					Six Months Ended					Total Incurred Since Inception
	June 28, 2015			June 29, 2014		June 28, 2015			June 29, 2014		Total Incurred Since Inception
Severance and related employee costs	$	303		$	393	$	629		$	5,926	$	17,887
Professional fees	110			558		151			3,189		5,964
Other (a)	(128		)	325		(45		)	2,762		4,496
	285			1,276		735			11,877		28,347
Accelerated depreciation and amortization (b)	1,622			—		1,622			475		19,036
Share-based compensation (c)	—			—		—			3,635		5,013
Total system optimization initiative	$	1,907		$	1,276	$	2,357		$	15,987	$	52,396

_______________


(a)	The three and six months ended June 28, 2015 includes a reversal of an accrual of $210 as a result of a change in estimate.


(b)	Primarily includes accelerated amortization of previously acquired franchise rights related to company-owned restaurants in territories that will be or have been 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.

The table below presents a rollforward of our accrual for our system optimization initiative, which is included in “Accrued expenses and other current liabilities.”



	Balance December 28, 2014		Charges			Payments			Balance June 28, 2015
Severance and related employee costs	$	2,235	$	629		$	(2,438	)	$	426
Professional fees	146		151			(159		)	138
Other	423		(45		)	(254		)	124
	$	2,804	$	735		$	(2,851	)	$	688