Intangible Assets

Goodwill. The Company is required to review goodwill for impairment annually, or more frequently when events and circumstances indicate that the carrying amount may be impaired. If the determined fair value of goodwill is less than the related carrying amount, an impairment loss is recognized. The Company performs its annual impairment assessment as of the last day of its fiscal year and does not believe circumstances have changed since the last assessment date which would make it necessary to reassess the value of its goodwill. There have been no recorded goodwill impairment losses during the six months ended June 30, 2019 or July 1, 2018. The change in goodwill for the six months ended June 30, 2019 is summarized below.



Balance at December 30, 2018	$	38,469
Acquisitions of restaurants (Note 2)	67,694
Balance at June 30, 2019	$	106,163

Franchise Rights. Amounts allocated to franchise rights for each acquisition of Burger King^® and Popeyes^®restaurants are amortized using the straight-line method over the average remaining term of the acquired franchise agreements plus one twenty-year renewal period.

The Company assesses the potential impairment of franchise rights whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an indicator of impairment exists, an estimate of the aggregate undiscounted cash flows from the acquired restaurants is compared to the respective carrying value of franchise rights for each acquisition. If an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. No impairment charges were recorded related to the Company’s franchise rights for the three or six months ended June 30, 2019 and July 1, 2018. The change in franchise rights for the six months ended June 30, 2019 is summarized below:



Balance at December 30, 2018	$	175,897
Acquisitions of restaurants (Note 2)	153,348
Amortization expense	(4,072		)
Balance at June 30, 2019	$	325,173

Amortization expense related to franchise rights was $2.0 million and $1.8 million for the three months ended June 30, 2019 and July 1, 2018, respectively and $4.1 million and $3.6 million for the six months ended June 30, 2019 and July 1, 2018, respectively. The Company expects annual amortization expense to be $8.3 million in 2019 and $8.4 million in each of the following five years.