XML 34 R19.htm IDEA: XBRL DOCUMENT v3.6.0.2
Refranchising Initiative (Tables)
 3 Months Ended
Nov. 30, 2016
Restructuring and Related Activities [Abstract]  
Summary of the pretax activity recorded as a result of the refranchising initiative
The following is a summary of the pretax activity recorded as a result of the refranchising initiative:

 
Three months ended November 30, 2016
Number of Company Drive-Ins sold to franchisees
56

 
 
Proceeds from sales of Company Drive-Ins
$
8,950

 
 
Assets sold, net of retained minority investment (1)
(5,461
)
Goodwill related to sales of Company Drive-Ins
(377
)
Initial lease payment for real estate option (2)
(3,810
)
Loss on assets held for sale
(259
)
Refranchising initiative gains (losses), net
$
(957
)
_______________
(1)
Net assets sold consisted primarily of equipment.
(2)
As part of a 53 drive-in refranchising transaction, the Company entered into a direct financing lease which includes an option for the franchisee to purchase the real estate within the next 24 months. In accordance with lease accounting requirements, since the exercise of this option can occur at any time within the next 24 months, the portion of the proceeds from the refranchising attributable to the fair value of the option represents the initial minimum lease payment for the real estate. Unless and until the option is exercised or expires, the franchisee will make monthly lease payments of $0.3 million through November 2017 and $0.1 million thereafter, through November 2018, which will be included in other operating income.
 
Refranchising Initiative
Fiscal Year 2016
Number of Company Drive-Ins sold to franchisees (1)
29

 
 
Proceeds from sales of Company Drive-Ins
$
3,568

 
 
Assets sold, net of retained minority investment (2)
(2,402
)
Goodwill related to sales of Company Drive-Ins
(194
)
Refranchising initiative gains (losses), net
$
972

_______________
(1)
Company Drive-Ins refranchised as part of the refranchising initiative announced in June 2016.
(2)
Net assets sold consisted primarily of equipment.
Components of net investment in direct financing leases
Components of net investment in direct financing leases are as follows at November 30:
 
 
November 30,
2016
 
August 31,
2016
Minimum lease payments receivable
 
$
33,490

 
$
15,108

Less unearned income
 
(6,483
)
 
(5,134
)
Net investment in direct financing lease
 
27,007

 
9,974

Less amount due within one year
 
(3,177
)
 
(115
)
Amount due after one year
 
$
23,830

 
$
9,859
Future minimum rental payments receivable
Future minimum rental payments receivable as of November 30, 2016 are as follows:
 
 
Direct Financing Lease
Years ended August 31:
 
 
2017
 
$
744

2018
 
3,948

2019
 
13,132

2020
 
1,230

2021
 
1,325

Thereafter
 
13,111

 
 
33,490

Less unearned income
 
(6,483
)
 
 
$
27,007
Components of assets held for sale
The following table sets forth the components of assets held for sale:
 
 
November 30,
2016
 
August 31,
2016
Property and equipment, net (1)
 
$
7,558

 
$
5,299

Goodwill, net
 
90

 
—

Total assets held for sale
 
$
7,648

 
$
5,299

________________
(1) Includes loss on anticipated sale of $0.3 million to reflect assets at fair value.