Quarterly report pursuant to Section 13 or 15(d)

Acquisition of Red Robin Franchised Restaurant

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Acquisition of Red Robin Franchised Restaurant
 6 Months Ended
Jul. 08, 2012
Acquisition of Red Robin Franchised Restaurant  
Acquisition of Red Robin Franchised Restaurant

5.   Acquisition of Red Robin Franchised Restaurant

 

On April 9, 2012, the Company entered into an agreement with one of its franchisees to purchase the assets of one restaurant.  This acquisition closed on June 19, 2012.  The purchase price was approximately $3.2 million. The consolidated statements of operations include the results of operations for the restaurant from the date of acquisition. The pro forma impact of the acquisition on prior periods is not presented, as the impact was not material to reported results.

 

The Company preliminarily allocated the purchase price to the tangible and intangible assets acquired in the acquisition at their estimated fair values with the remainder allocated to goodwill as follows: $1.9 million to intangibles, which represent the fair value of franchise rights and liquor licenses, $760,000 to goodwill, $540,000 to fixed assets and $47,000 to inventory. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 measurement and are subject to change.