Goodwill and Intangible Assets

12 Months Ended

Dec. 27, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

The following table reflects the changes in carrying amounts of goodwill:



	December 27, 2017		December 28, 2016
	(In thousands)
Balance, beginning of year	$	35,233	$	33,454
Additions related to acquisitions	3,021		1,827
Adjustments related to the sale of restaurants	15		(48		)
Balance, end of year	$	38,269	$	35,233

Intangible assets were comprised of the following:



	December 27, 2017				December 28, 2016
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Intangible assets with indefinite lives:
Trade names	$	44,080	$	—	$	44,076	$	—
Liquor licenses	166		—		166		—
Intangible assets with definite lives:
Franchise and license agreements	—		—		190		186
Reacquired franchise rights	15,252		2,389		11,498		1,251
Intangible assets	$	59,498	$	2,389	$	55,930	$	1,437

During the year ended December 27, 2017, we acquired ten franchised restaurants and one former franchised restaurant for $8.8 million, of which $4.5 million was allocated to reacquired franchise rights, $1.3 million to property and $3.0 million to goodwill. In addition, we recorded $2.3 million of capital leases in connection with the acquired franchised restaurants. We account for the acquisition of franchised restaurants using the acquisition method of accounting for business combinations. The purchase price allocations were based on Level 3 fair value estimates.

The weighted-average life of the reacquired franchise rights is nine years. The amortization expense for definite-lived intangibles and other assets for 2017, 2016 and 2015 was $2.5 million, $1.5 million and $1.5 million, respectively. Estimated amortization expense for intangible assets with definite lives in the next five years is as follows:



	(In thousands)
2018	$	2,251
2019	1,963
2020	1,783
2021	1,181
2022	1,024

We performed an annual impairment test as of December 27, 2017 and determined that none of the recorded goodwill or other intangible assets with indefinite lives were impaired.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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