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Refranchising Initiative (Tables)
 6 Months Ended
Feb. 28, 2017
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 ($ in thousands):

 
Three months ended
 
Six months ended
 
February 28, 2017
 
February 28, 2017
Number of refranchised Company Drive-Ins
54

 
110

 
 
 
 
Proceeds from sales of Company Drive-Ins
$
11,086

 
$
20,036

 
 
 
 
Assets sold, net of retained minority investment (1)
(3,277
)
 
(8,738
)
Goodwill related to sales of Company Drive-Ins
(589
)
 
(966
)
Initial and subsequent lease payments for real estate option (2)
414

 
(3,396
)
Deferred gain for real estate option (3)
(1,040
)
 
(1,040
)
Gain (loss) on assets held for sale
194

 
(65
)
Refranchising initiative gains (losses), net
$
6,788

 
$
5,831

_______________
(1)
Net assets sold consisted primarily of equipment.
(2)
During the first quarter of fiscal year 2017, 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. We are including lease payments received, net of sub-lease expenses, to quantify the net refranchising gain (loss).
(3)
The deferred gain of $1.0 million is recorded in other non-current liabilities as a result of a real estate purchase option extended to the franchisee that will be exercised or expire between January 2020 and December 2023.

 
Refranchising Initiative
Fiscal Year 2016
Number of refranchised Company Drive-Ins (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 as of February 28, 2017 are as follows:
 
 
February 28,
2017
 
August 31,
2016
Minimum lease payments receivable
 
$
33,988

 
$
15,108

Less unearned income
 
(6,300
)
 
(5,134
)
Net investment in direct financing lease
 
27,688

 
9,974

Less amount due within one year
 
(16,001
)
 
(115
)
Amount due after one year
 
$
11,687

 
$
9,859
Future minimum rental payments receivable
Future minimum rental payments receivable as of February 28, 2017 are as follows:
 
 
Direct Financing Lease
Years ended August 31:
 
 
2017
 
$
16,202

2018
 
1,048

2019
 
1,117

2020
 
1,230

2021
 
1,326

Thereafter
 
13,065

 
 
33,988

Less unearned income
 
(6,300
)
 
 
$
27,688