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Franchise Rights Acquired, Goodwill and Other Intangible Assets | 12 Months Ended
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Jan. 01, 2022
Goodwill And Intangible Assets Disclosure [Abstract] |
Franchise Rights Acquired, Goodwill and Other Intangible Assets |
7. | Franchise Rights Acquired, Goodwill and Other Intangible Assets
The Company performed its annual impairment review of indefinite-lived intangible assets, including franchise rights acquired with indefinite lives, and goodwill for fiscal 2021 and fiscal 2020 on May 9, 2021 and May 3, 2020, respectively. In performing its annual impairment analysis as of May 9, 2021 and May 3, 2020, the Company determined that the carrying amounts of its franchise rights acquired with indefinite lives units of account and goodwill reporting units did not exceed their respective fair values and therefore, no impairment existed. The Company performed an interim impairment analysis as of January 1, 2022 for the Canada indefinite-lived franchise rights acquired and determined the carrying amount for this unit of account did not exceed its respective fair value and therefore, no impairment existed. With respect to its Brazil reporting unit, during the first quarter of fiscal 2020, the Company made a strategic decision to shift to an exclusively Digital business in that country. The Company determined that this decision, together with the negative impact of COVID-19, the ongoing challenging economic environment in Brazil and its reduced expectations regarding the reporting unit’s future operating cash flows, required the Company to perform an interim goodwill impairment analysis. In performing this discounted cash flow analysis, the Company determined that the carrying amount of this reporting unit exceeded its fair value and as a result recorded an impairment charge of $3,665, which comprised the remaining balance of goodwill for this reporting unit. Franchise rights acquired are due to acquisitions of the Company’s franchised territories as well as the acquisition of franchise promotion agreements and other factors associated with the acquired franchise territories. For the fiscal year ended January 1, 2022, the change in the carrying value of franchise rights acquired was due to the franchisee acquisitions as described in Note 6 and the effect of exchange rate changes. Goodwill primarily relates to the acquisition of the Company by The Kraft Heinz Company (successor to H.J. Heinz Company) in 1978, and the Company’s acquisition s of W W.com, LLC (formerly known as WW.com, Inc. and WeightWatchers.com, Inc.) in 2005 and the Company’s franchised territories. See Note 6 for additional information about acquisitions by the Company. For the fiscal year ended January 1, 2022, the change in the carrying amount of goodwill wa s due to the Maine Acquisition and the effect of exchange rate changes as follows:
|  | North |  |  | Continental |  |  | United |  |  |  |  |  |  |  |  |
|  | America |  |  | Europe |  |  | Kingdom |  |  | Other |  |  | Total |
Balance as of December 28, 2019 |  | $ | 143,940 |  |  | $ | 7,015 |  |  | $ | 1,213 |  |  | $ | 5,748 |  |  | $ | 157,916 |
Goodwill impairment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,665 | ) |  |  | (3,665 | )
Effect of exchange rate changes |  |  | 1,131 |  |  |  | 777 |  |  |  | 55 |  |  |  | (597 | ) |  |  | 1,366 |
Balance as of January 2, 2021 |  | $ | 145,071 |  |  | $ | 7,792 |  |  | $ | 1,268 |  |  | $ | 1,486 |  |  | $ | 155,617 |
Goodwill acquired during the period |  |  | 2,153 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,153 |
Effect of exchange rate changes |  |  | 306 |  |  |  | (606 | ) |  |  | (14 | ) |  |  | (82 | ) |  |  | (396 | )
Balance as of January 1, 2022 |  | $ | 147,530 |  |  | $ | 7,186 |  |  | $ | 1,254 |  |  | $ | 1,404 |  |  | $ | 157,374 |
Finite-lived Intangible Assets The carrying values of finite-lived intangible assets as of January 1, 2022 and January 2, 2021 were as follows:
|  | January 1, 2022 |  |  | January 2, 2021 |
|  | Gross |  |  |  |  |  |  | Gross |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  | Carrying |  |  | Accumulated |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amortization |
Capitalized software costs |  | $ | 115,065 |  |  | $ | 94,771 |  |  | $ | 131,420 |  |  | $ | 109,170 |
Website development costs |  |  | 110,678 |  |  |  | 78,629 |  |  |  | 95,718 |  |  |  | 67,656 |
Trademarks |  |  | 12,116 |  |  |  | 11,677 |  |  |  | 11,999 |  |  |  | 11,457 |
Other |  |  | 14,021 |  |  |  | 5,677 |  |  |  | 14,093 |  |  |  | 5,238 |
Trademarks and other intangible assets |  | $ | 251,880 |  |  | $ | 190,754 |  |  | $ | 253,230 |  |  | $ | 193,521 |
Franchise rights acquired |  |  | 7,905 |  |  |  | 4,766 |  |  |  | 7,925 |  |  |  | 4,575 |
Total finite-lived intangible assets |  | $ | 259,785 |  |  | $ | 195,520 |  |  | $ | 261,155 |  |  | $ | 198,096 |
Aggregate amortization expense for finite-lived intangible assets was recorded in the amounts of $32,220, $29,828 and $29,330 for the fiscal years ended January 1, 2022, January 2, 2021 and December 28, 2019, respectively. Estimated amortization expense of existing finite-lived intangible assets for the next five fiscal years and thereafter was as follows:
Fiscal 2022 |  | $ | 28,386 |
Fiscal 2023 |  | $ | 18,343 |
Fiscal 2024 |  | $ | 7,932 |
Fiscal 2025 |  | $ | 986 |
Fiscal 2026 and thereafter |  | $ | 8,618 |

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