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ASSET IMPAIRMENT AND ESTIMATED LEASE TERMINATION AND OTHER CLOSING COSTS | 9 Months Ended
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Oct. 01, 2017
Asset Impairment Charges [Abstract] |
Asset Impairment, Estimated Lease Termination and Other Closing Costs [Text Block] | (11) Asset Impairment and Estimated Lease Termination and Other Closing Costs In accordance with FASB Accounting Standards Codification Topic 360 for Property, Plant, and Equipment, the Company evaluates restaurant sites and long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of restaurant sites to be held and used is measured by a comparison of the carrying amount of the restaurant site to the undiscounted future net cash flows expected to be generated on a restaurant-by-restaurant basis. If a restaurant is determined to be impaired, the loss is measured by the amount by which the carrying amount of the restaurant’s assets exceeds its fair value. Fair value is estimated based on the best information available including estimated future cash flows, expected growth rates in comparable restaurant sales, remaining lease terms, discount rate, anticipated sale prices and other factors. If these assumptions change in the future, the Company may be required to take additional impairment charges for the related assets. Considerable management judgment is necessary to estimate future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company maintains lease reserves on locations for which the Company is the primary obligor of a lease agreement but expects to incur losses after the Company ceases to use the location. During the three and nine months ended October 1, 2017, the Company recorded lease reserves and corresponding lease termination charges on Company-owned closed restaurants and franchisee-operated locations, for which the Company was the primary obligor of the lease agreement. Restaurant Optimization - During fiscal 2016, the Company recorded asset impairment charges associated with certain restaurants which were slow to respond to several initiatives to turnaround operating performance. As a result, the Company determined that the estimated fair value of the assets was less than the carrying amount and recognized impairment charges to reduce the related assets to their estimated fair value. As the Company continues to evaluate its restaurant portfolio, the Company anticipates addressing the ongoing operation of the locations impaired by way of lease restructuring, lease assignment or subsequent closure at the end of their natural lease term. During the nine months ended October 1, 2017, the Company closed twelve restaurants as part of the Restaurant Optimization plan. Pursuant to the restaurant optimization plan, the Company reassessed the estimated useful life of its restaurants slated for closure significantly before the end of the previously estimated useful life. As a result of this reassessment, the Company is depreciating certain of its restaurant assets over a shorter period of time, which resulted in higher depreciation and amortization expense of approximately $754,000 during the nine months ended October 1, 2017. The following is a summary of asset impairment, estimated lease termination, and other closing costs for the three and nine months ended October 1, 2017 and October 2, 2016. These costs are included in asset impairment and estimated lease termination and other closing costs in the consolidated statements of operations.
|  | Three Months Ended |  | Nine Months Ended
(dollars in thousands) |  | October 1, 2017 |  | October 2, 2016 |  | October 1, 2017 |  | October 2, 2016
Restaurant Optimization |  |  |  |  |  |  |  |  |  |  |  |
Asset impairments, net |  | $ | 822 |  | $ | 3,420 |  | $ | 3,864 |  | $ | 4,313
Lease termination charges |  |  | 1,479 |  |  | — |  |  | 3,014 |  |  | —
Restaurant closure expenses |  |  | 104 |  |  | 200 |  |  | 133 |  |  | 200
Software |  |  | — |  |  | — |  |  | — |  |  | 171
Asset impairment, estimated lease termination and other closing costs |  | $ | 2,405 |  | $ | 3,620 |  | $ | 7,011 |  | $ | 4,684

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- Definition The entire disclosure for the details of the charge against earnings resulting from the aggregate write down of all assets from their carrying value to their fair value. Disclosure may also include a description of the impaired asset and facts and circumstances leading to the impairment, amount of the impairment loss and where the loss is located in the income statement, method(s) for determining fair value, and the segment in which the impaired asset is reported. + References No definition available. + Details
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