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Nature of Operations and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 29, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Number of Restaurants

The following table summarizes the number of restaurants as of the end of each fiscal year: 

		2019		2018		2017
Company-operated		137		137		276
Franchise		2,106		2,100		1,975
Total system		2,243		2,237		2,251

The following table summarizes the number of restaurants sold to franchisees, the number of restaurants developed by franchisees, and gains recognized in each fiscal year (dollars in thousands):

		2019				2018				2017
Restaurants sold to franchisees		—				135				178
New restaurants opened by franchisees		19				11				18
Proceeds from the sale of company-operated restaurants:
Cash (1)		$	1,280			$	26,486			$	99,591
Notes receivable		—				70,461				—
		$	1,280			$	96,947			$	99,591
Net assets sold (primarily property and equipment)		$	—			$	(21,329	)		$	(30,597	)
Lease commitment charges (2)		—				—				(11,737		)
Goodwill related to the sale of company-operated restaurants		(2		)		(4,663		)		(10,062		)
Other (3)		88				(24,791		)		(9,161		)
Gains on the sale of company-operated restaurants		$	1,366			$	46,164			$	38,034

____________________________

(1) Amounts in 2019, 2018, and 2017 include additional proceeds of $1.3 million, $1.4 million, and $0.2 million related to the extension of the underlying franchise and lease agreements from the sale of restaurants in prior years.

(2) Charges are for operating restaurant leases with lease commitments in excess of our sublease rental income.

(3)

Amounts in 2018 primarily represent $9.2 million of costs related to franchise remodel incentives, $8.7 million reduction of gains related to the modification of certain 2017 refranchising transactions, $2.3 million of maintenance and repair expenses and $3.7 million of other miscellaneous non-capital charges. Amounts in 2017 represent impairment of $4.6 million and equipment write-offs of $1.4 million related to restaurants closed in connection with the sale of the related markets, maintenance and repair charges, and other miscellaneous non-capital charges.

Summary of New Accounting Standard Impact

The following table summarizes the impacts of adopting ASC 606 on our consolidated financial statements as of and for the period ended September 29, 2019 (in thousands):

					Adjustments
	As Reported				Franchise Fees				Marketing and Sourcing Fees				Technology Support Fees				Balances without Adoption
Consolidated Statement of Earnings
Fiscal Year Ended September 29, 2019
Franchise royalties and other	$	169,811			$	(3,745	)		$	—			$	—			$	166,066
Franchise contributions for advertising and other services	$	170,674			$	—			$	(161,873	)		$	(8,801	)		$	—
Total revenues	$	950,107			$	(3,745	)		$	(161,873	)		$	(8,801	)		$	775,688
Franchise advertising and other services expenses	$	178,093			$	—			$	(161,873	)		$	(16,220	)		$	—
Selling, general and administrative expenses	$	76,357			$	—			$	—			$	7,419			$	83,776
Total operating costs and expenses, net	$	747,884			$	—			$	(161,873	)		$	(8,801	)		$	577,210
Earnings from operations	$	202,223			$	(3,745	)		$	—			$	—			$	198,478
Earnings from continuing operations and before income taxes	$	115,772			$	(3,745	)		$	—			$	—			$	112,027
Income tax expense	$	24,025			$	(972	)		$	—			$	—			$	23,053
Earnings from continuing operations	$	91,747			$	(2,773	)		$	—			$	—			$	88,974
Net earnings	$	94,437			$	(2,773	)		$	—			$	—			$	91,664
Consolidated Balance Sheet
September 29, 2019
Prepaid expenses	$	9,015			$	972			$	—			$	—			$	9,987
Total current assets	$	227,128			$	972			$	—			$	—			$	228,100
Deferred tax assets	$	85,564			$	(12,958	)		$	—			$	—			$	72,606
Other assets, net	$	206,685			$	269			$	—			$	—			$	206,954
Total other assets	$	339,421			$	(12,689	)		$	—			$	—			$	326,732
Total assets	$	958,483			$	(11,717	)		$	—			$	—			$	946,766
Accrued liabilities	$	120,083			$	(4,978	)		$	—			$	—			$	115,105
Total current liabilities	$	157,923			$	(4,978	)		$	—			$	—			$	152,945
Other long-term liabilities	$	263,770			$	(41,295	)		$	—			$	—			$	222,475
Total long-term liabilities	$	1,538,144			$	(41,295	)		$	—			$	—			$	1,496,849
Retained earnings	$	1,577,034			$	34,556			$	—			$	—			$	1,611,590
Total stockholders’ deficit	$	(737,584	)		$	34,556			$	—			$	—			$	(703,028	)
Total liabilities and stockholders’ deficit	$	958,483			$	(11,717	)		$	—			$	—			$	946,766

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Tabular disclosure of franchisors that are included in the discussion of the nature of an entity's operations.

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Tabular disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

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