Intangible Assets (Notes)

6 Months Ended

Jun. 28, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Franchise Rights [Text Block]

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 were no recorded goodwill impairment losses during the three and six months ended July 4, 2021 or June 28, 2020. The change in goodwill for the six months ended July 4, 2021 is summarized below:

Balance at January 3, 2021	$	122,619
Acquisitions of restaurants (Note 2)	629
Balance at July 4, 2021	$	123,248

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 and six months ended July 4, 2021 and June 28, 2020. The change in franchise rights for the six months ended July 4, 2021 is summarized below:

Balance at January 3, 2021	$	334,597
Acquisitions of restaurants (Note 2)	6,613
Amortization expense	(6,883)
Balance at July 4, 2021	$	334,327

Amortization expense related to franchise rights was $3.4 million for each of the three months ended July 4, 2021 and June 28, 2020, and $6.9 million and $7.3 million for the six months ended July 4, 2021 and June 28, 2020, respectively. The Company expects annual amortization expense to be $13.9 million in 2021 and $14.0 million in each of the following five years.