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Strategic Corporate Reorganization for Long-term Growth

12 Months Ended

Dec. 27, 2020

Strategic Corporate Reorganization for Long-term Growth

Strategic Corporate Reorganization for Long-term Growth

17. Strategic Corporate Reorganization for Long-term Growth

On September 17, 2020, we announced plans to open an office in Atlanta, Georgia located in Three Ballpark Center at The Battery Atlanta. The 60,000 square foot modern space will be designed to drive continued menu innovation and optimized integration across marketing, communications, customer experience, operations, human resources, diversity, equity and inclusion, communications, financial planning and analysis, investor relations and development functions. Our information technology, finance, supply chain, and legal teams will continue to operate in our Louisville, Kentucky office, which remains critical to our success. We also maintain an office outside of London, UK, where our international operations are managed.

The opening of the office in Atlanta and related organizational changes are projected to be completed by the summer of 2021. All affected employees were either offered an opportunity to continue with the organization or were offered a severance package. As a result, we expect to incur certain one-time corporate reorganization costs of approximately $15.0 to $20.0 million related to employee severance and transition, recruitment and relocation, and third party and other costs through 2021.

We record severance as a one-time termination benefit and recognize the expense ratably over the employees’ required future service period. All other costs, including employee transition costs, recruitment and relocation costs, and third-party costs, are recognized in the period incurred. All strategic corporate reorganization costs have been recorded in General and administrative expenses on the Consolidated Statement of Operations.

Strategic corporate reorganization costs recorded for the year ended December 27, 2020 consist of the following:


	Year Ended
	Dec. 27,
	2020
Employee severance and other employee transition costs	$	4,775
Recruiting and professional fees		1,598
Other costs		552
Total strategic corporate reorganization costs		6,925
Stock-based compensation forfeitures on unvested awards		(940)
Total strategic corporate reorganization costs, net of stock forfeitures	$	5,985

As of December 27, 2020, the estimate of unpaid strategic corporate reorganization costs are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheet. The following table summarizes the activity for the year ended December 27, 2020:


	Balance at						Balance at
	Dec. 29						Dec. 27
	2019		Charges		Payments		2020
Employee severance and other employee transition costs	$	—	$	4,775	$	(160)	$	4,615
Recruiting and professional fees		—		1,598		(1,453)		145
Other costs		—		552		(451)		101
Total strategic corporate reorganization liability	$	—	$	6,925	$	(2,064)	$	4,861

We expect to recognize additional costs associated with the corporate reorganization in 2021 of approximately $9.0 to $14.0 million, including expenditures related to (i) employee severance and other employee transition costs of approximately $2.0 million to $3.0 million, (ii) relocation and recruiting costs of $6.0 million to $9.0 million, and (iii) third-party and other costs of $1.0 million to $2.0 million.