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Refranchising of Company Drive-Ins Refranchising of Company Drive-Ins (Tables)
 12 Months Ended
Aug. 31, 2017
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract]  
Summary of 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, except number of refranchised Company Drive-Ins):
 
Fiscal year ended August 31,
 
2017
 
2016
Number of refranchised Company Drive-Ins
110

 
29

 
 
 
 
Proceeds from sales of Company Drive-Ins
$
20,036

 
$
3,568

Proceeds from sale of real estate (1)
11,726

 
—

 
 
 
 
Real estate assets sold (1)
(12,095
)
 
(2,402
)
Assets sold, net of retained minority investment (2)
(7,891
)
 
—

Initial and subsequent lease payments for real estate option (1)
(3,178
)
 
—

Goodwill related to sales of Company Drive-Ins
(966
)
 
(194
)
Deferred gain for real estate option (3)
(809
)
 
—

Loss on assets held for sale
(65
)
 
—

Refranchising initiative gains, net
$
6,758

 
$
972

_______________
(1)
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 included an option for the franchisee to purchase the real estate within the next 24 months. In accordance with lease accounting requirements, because the exercise of this option could occur at any time within 24 months, the portion of the proceeds from the refranchising attributable to the fair value of the option was applied as the initial minimum lease payment for the real estate. The franchisee exercised the option in the last six months of the fiscal year. Until the option was fully exercised, the franchisee made monthly lease payments which are included in other operating income, net of sub-lease expense.
(2)
Net assets sold consisted primarily of equipment.
(3)
The deferred gain of $0.8 million is recorded in other non-current liabilities as a result of a real estate purchase option extended to the franchisee in the second quarter of fiscal year 2017. The deferred gain will continue to be amortized into income through January 2020 when the option becomes exercisable.