Refranchisings and Acquisitions

3 Months Ended

Mar. 27, 2019

Refranchisings and Acquisitions [Abstract]

Refranchisings

The following table summarizes the activity related to our current real estate and development strategy. Gains on the sales of company restaurants and real estate are included as a component of operating (gains), losses and other charges, net in our Condensed Consolidated Statements of Income. See Note 5.



	Quarter Ended
	March 27, 2019			March 28, 2018
	(Dollars in thousands)
Restaurants sold to franchisees	3			—
Gains on sales of company restaurants:
Cash proceeds	$	2,833		$	—
Less: Property sold	(550		)	—
Less: Goodwill related to the sales of company restaurants	(79		)	—
Total gains of sales of company restaurants	$	2,204		$	—

Real estate sold	1			—
Gains on sales of real estate:
Cash proceeds	$	4,688		—
Noncash consideration	3,000			—
Less: Property sold	(190		)	—
Total gains on sale of real estate	$	7,498		$	—

In addition to the cash proceeds received on the sale of real estate, we also recorded additional noncash consideration for the fair value of restaurant space we expect to receive within a building being developed by the buyer of the real estate. The $3.0 million of noncash consideration is recorded as a component of other noncurrent assets in our Condensed Consolidated Balance Sheets. The fair value of the noncash consideration is based upon Level 2 inputs.

As of March 27, 2019, we have recorded assets held for sale at their carrying amount of $15.0 million (comprised of property of $11.7 million, goodwill of $1.6 million and reacquired franchise rights of $1.7 million) related to 48 company restaurants. There were $0.7 million in assets held for sale as of December 26, 2018 related to three company restaurants and one piece of real estate. The fair value of assets held for sale is based upon Level 2 inputs, which include sales agreements.

Acquisitions

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 following table summarizes our acquisition activity.



	Quarter Ended
	March 27, 2019		March 28, 2018
	(Dollars in thousands)
Restaurants acquired from franchisees	—		5
Purchase price allocation:
Reacquired franchise rights	$	—	$	5,315
Property	—		1,029
Goodwill	—		1,574
Total purchase price	$	—	$	7,918

Financing leases recorded	$	—	$	2,409

Real estate acquired	2		—
Total purchase price	$	4,706	$	—