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System Optimization Gains, Net
 12 Months Ended
Jan. 03, 2021
Plant, Property and Equipment  
System Optimization Gains, Net Properties
Year End
January 3, 2021December 29, 2019
Land$372,473 $375,109 
Buildings and improvements504,504 508,602 
Leasehold improvements409,306 405,158 
Office, restaurant and transportation equipment255,469 279,799 
1,541,752 1,568,668 
Accumulated depreciation and amortization(625,863)(591,668)
$915,889 $977,000 

Depreciation and amortization expense related to properties was $77,656, $81,219 and $79,009 during 2020, 2019 and 2018, respectively.
System Optimization  
Plant, Property and Equipment  
System Optimization Gains, Net System Optimization Gains, Net
The Company’s system optimization initiative included a shift from Company-operated restaurants to franchised restaurants over time, through acquisitions and dispositions, as well as facilitating Franchise Flips. As of January 1, 2017, the Company completed its plan to reduce its ongoing Company-operated restaurant ownership to approximately 5% of the total system. While the Company has no plans to reduce its ownership below the approximately 5% level, the Company expects to continue to optimize the Wendy’s system through Franchise Flips, as well as evaluating strategic acquisitions of franchised restaurants and strategic dispositions of Company-operated restaurants to existing and new franchisees, to further strengthen the franchisee base, drive new restaurant development and accelerate reimages. During 2020, 2019 and 2018, the Company facilitated 54, 37 and 96 Franchise Flips, respectively. Additionally, during 2020 and 2018, the Company completed the sale of one and three Company-operated restaurants to franchisees, respectively. No Company-operated restaurants were sold to franchisees during 2019. The Company expects to sell 43 Company-operated restaurants in New York to franchisees in the second quarter of 2021.

Gains and losses recognized on dispositions are recorded to “System optimization gains, net” in our consolidated statements of operations. Costs related to acquisitions and dispositions under our system optimization initiative are recorded to “Reorganization and realignment costs,” which are further described in Note 5. All other costs incurred related to facilitating Franchise Flips are recorded to “Franchise support and other costs.”
The following is a summary of the disposition activity recorded as a result of our system optimization initiative:
Year Ended
202020192018
Number of restaurants sold to franchisees1 — 3 
Proceeds from sales of restaurants$50 $— $1,436 
Net assets sold (a)(34)— (1,370)
Goodwill related to sales of restaurants— — (208)
Net favorable leases— — 220 
Other — — 11 
16 — 89 
Post-closing adjustments on sales of restaurants (b)362 1,087 445 
Gain on sales of restaurants, net378 1,087 534 
Gain (loss) on sales of other assets, net (c)2,770 196 (71)
System optimization gains, net$3,148 $1,283 $463 
_______________

(a)Net assets sold consisted primarily of equipment.

(b)2020, 2019 and 2018 include the recognition of deferred gains of $368, $911 and $1,029, respectively, as a result of the resolution of certain contingencies related to the extension of lease terms for restaurants previously sold to franchisees. 2018 also includes cash proceeds, net of payments, of $6 related to post-closing reconciliations with franchisees.

(c)During 2020, 2019 and 2018, Wendy’s received cash proceeds of $6,041, $3,448 and $1,781, respectively, primarily from the sale of surplus and other properties.

Assets Held for Sale

January 3, 2020December 29, 2019
Number of restaurants classified as held for sale43 — 
Net restaurant assets held for sale (a)$20,587 $— 
Other assets held for sale (b)$1,732 $1,437 
_______________

(a)Net restaurant assets held for sale include the New York Company-operated restaurants we expect to sell in the second quarter of 2021 and consist primarily of cash, inventory, property and an estimate of allocable goodwill.

(b)Other assets held for sale primarily consist of surplus properties.

Assets held for sale are included in “Prepaid expenses and other current assets.”