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Goodwill and Other Intangible Assets | 12 Months Ended
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Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Note 4 – Goodwill and Other Intangible Assets The Company has two reporting units, Wholesale and Retail. Changes in the carrying amount of goodwill were as follows:
(In thousands) | Wholesale |  |  | Retail |  |  | Total |
Balance at January 2, 2021 and January 1, 2022 | $ |  | 181,035 |  |  | $ |  | — |  |  | $ |  | 181,035 |
Acquisitions |  |  | — |  |  |  |  | 1,125 |  |  |  |  | 1,125 |
Balance at December 31, 2022 | $ |  | 181,035 |  |  | $ |  | 1,125 |  |  | $ |  | 182,160 |
The Company acquired goodwill within the Retail reporting unit of $1.1 million related to an immaterial acquisition during the second quarter of 2022. The Company reviews goodwill and other intangible assets for impairment annually, during the fourth quarter of each year, and more frequently if circumstances indicate impairment is more likely than not to have occurred. Following the change in the reportable segments in the third quarter of 2022, as disclosed in Note 1, the Company evaluated the reporting units within the Wholesale segment in accordance with ASC 350 Intangibles - Goodwill and Other. As a result of the evaluation, the Company concluded that there was a single reporting unit within the Wholesale segment. Due to the change in reporting units, the Company performed a test for impairment as of the beginning of the third quarter immediately before and after the change. Testing goodwill and other intangible assets for impairment requires management to make significant estimates about the Company’s future performance, cash flows, and other assumptions that can be affected by potential changes in economic, industry or market conditions, business operations, competition, or the Company’s stock price and market capitalization. During the Company's third quarter impairment review, projected cash flows were discounted based on a weighted average cost of capital ("WACC") of 9.6%. This WACC was developed from adjusted market-based and company specific factors, current interest rates, equity risk premiums, and other market-based expectations regarding expected investment returns. The development of the WACC requires estimates of an equity rate of return and a debt rate of return, which are specific to the industry in which the Wholesale reporting unit operates. The Company concluded that the fair values of both the previous Food Distribution reporting unit, as well as the current Wholesale reporting unit, were substantially in excess of their carrying values. As the Company performed a quantitative assessment in the third quarter of the current year, the Company also performed a qualitative assessment in the fourth quarter of the current year. The Company assessed the qualitative factors during the fourth quarter assessment and concluded that the fair value of the Wholesale reporting unit was more likely than not in excess of its carrying value. The following table reflects the components of amortized intangible assets, included in “Intangible assets, net” on the consolidated balance sheets:
|  |  | December 31, 2022 |  |  | January 1, 2022 |
|  |  | Gross |  |  |  |  |  |  | Gross |  |  |  |  |
|  |  | Carrying |  |  | Accumulated |  |  | Carrying |  |  | Accumulated |
(In thousands) |  |  | Amount |  |  | Amortization |  |  | Amount |  |  | Amortization |
Non-compete agreements |  |  |  | $ |  | 3,545 |  |  | $ |  | 2,621 |  |  | $ |  | 4,287 |  |  | $ |  | 2,792 |
Pharmacy customer prescription lists |  |  |  |  |  | 4,168 |  |  |  |  | 2,598 |  |  |  |  | 4,233 |  |  |  |  | 2,095 |
Customer relationships |  |  |  |  |  | 57,937 |  |  |  |  | 22,484 |  |  |  |  | 57,937 |  |  |  |  | 18,822 |
Trade names |  |  |  |  |  | — |  |  |  |  | — |  |  |  |  | 1,068 |  |  |  |  | 987 |
Franchise fees |  |  |  |  |  | 1,165 |  |  |  |  | 598 |  |  |  |  | 1,110 |  |  |  |  | 605 |
Total |  |  |  | $ |  | 66,815 |  |  | $ |  | 28,301 |  |  | $ |  | 68,635 |  |  | $ |  | 25,301 |
The weighted average amortization periods for amortizable intangible assets as of December 31, 2022 are as follows:
Non-compete agreements |  |  |  |  |  |  |  |  |  |  |  |  |  | 6.4 years
Pharmacy customer prescription lists |  |  |  |  |  |  |  |  |  |  |  |  |  | 8.0 years
Customer relationships |  |  |  |  |  |  |  |  |  |  |  |  |  | 16.4 years
Franchise fees |  |  |  |  |  |  |  |  |  |  |  |  |  | 10.0 years
Amortization expense for intangible assets was $5.0 million, $5.2 million and $5.7 million for 2022, 2021 and 2020, respectively. Estimated amortization expense for each of the five succeeding fiscal years is as follows:
(In thousands) | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026 |  |  | 2027 |
Amortization expense | $ |  | 4,828 |  |  | $ |  | 4,576 |  |  | $ |  | 4,180 |  |  | $ |  | 3,665 |  |  | $ |  | 3,660 |
The Company has indefinite-lived intangible assets that are not amortized, consisting primarily of indefinite-lived trade names and liquor licenses, totaling $67.8 million and $67.6 million as of December 31, 2022 and January 1, 2022, respectively. During the third quarter of 2020, the Company made the decision to abandon a tradename within the Wholesale segment to better integrate with the Company’s overall transportation operations, resulting in a $7.0 million impairment of the associated indefinite-lived tradename asset. During the fourth quarter of 2020, the Company recognized an impairment charge of $1.7 million, related to a tradename, based on a change in the assumptions supporting fair value.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI https://asc.fasb.org/topic&trid=2144416 + Details
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