Annual report pursuant to Section 13 and 15(d)

Other Charges

v3.22.0.1
Other Charges
 12 Months Ended
Dec. 26, 2021
Other Income and Expenses [Abstract]  
Other Charges Other Charges
Other charges consist of the following (in thousands):
Year Ended
December 26, 2021 December 27, 2020 December 29, 2019
Restaurant closures and refranchising costs (gains) $ 6,276  $ 19,846  $ (1,187)
Asset impairment 7,052  26,940  15,094 
Litigation contingencies 1,330  6,440  — 
COVID-19 related costs 1,288  1,858  — 
Board and shareholder matter costs 128  2,504  3,261 
Goodwill impairment —  95,414  — 
Severance and executive transition —  881  3,450 
Executive retention —  —  980 
Other charges $ 16,074  $ 153,883  $ 21,598 
Restaurant Closure and Refranchising Costs (Gains)
Restaurant closure costs represent costs incurred for permanently closed restaurants, including lease termination costs, as well as the ongoing restaurant operating costs of Company-owned restaurants that remained temporarily closed due to the COVID-19 pandemic.
During 2020, the Company temporarily closed 35 restaurants due to the onset of the COVID-19 pandemic. During periods of temporary closure, restaurant operating and occupancy costs were included in Restaurant closures and refranchising costs. The table below shows the disposition of these restaurants:
(Restaurants)
Restaurants Temporarily closed in March, 2020 as a result of the COVID-19 Pandemic: 35
Temporarily closed restaurants re-opened in 2020: 17
Temporarily closed restaurants permanently closed in 2020: 6
Restaurants temporarily closed as of December 27, 2020: 12
Temporarily closed restaurants re-opened in 2021: 1
Temporarily closed restaurants permanently closed in 2021: 10
Restaurants temporarily closed as of December 26, 2021(1):
1
(1) The Company intends to re-open the remaining temporarily closed restaurant in the first fiscal quarter of 2022.
During 2021, the Company permanently closed 14 restaurants. Ten of these restaurants were initially temporarily closed due to COVID-19 in 2020.
During 2020, the Company permanently closed 11 restaurants. Six of these restaurants were initially temporarily closed due to COVID-19. Due to permanent closure of certain restaurants during 2020, we impaired long-lived assets at six of the 11 permanently closed restaurants totaling $5.7 million.
Additionally, during 2020, the Company substantially completed the exit of Company-owned restaurants in Canada and accordingly recognized the accumulated currency translation adjustment as a loss in Other charges on the consolidated statements of operations and comprehensive loss totaling $5.5 million.
During 2019, the Company closed 18 restaurants resulting in a gain of $1.2 million. The gain is driven by early lease terminations on previously closed restaurants.
Asset Impairment
During 2021, the Company determined long-lived assets at ten locations were impaired and recognized non-cash impairment charges of $6.4 million primarily related to the impairment of the long-lived assets associated with our excess properties.
Additionally, the Company recognized $0.5 million of non-cash impairment charges related to the impairment of long lived intangible assets related to quota state liquor licenses at seven locations.
During 2020, the Company impaired long-lived assets of 40 Company-owned restaurants and recognized non-cash impairment charges of $21.7 million. Additionally, the Company impaired information technology assets totaling $5.2 million due to the COVID-19 pandemic redirecting our implementation of certain digital platforms in order to accelerate our speed to market.
During 2019, the Company impaired long-lived assets of 29 Company-owned restaurants and recognized non-cash impairment charges of $15.1 million.
Litigation Contingencies
In 2021 and 2020, the Company recorded $1.3 million and $6.4 million, respectively, of contingencies related to litigation matters. See Note 13, Commitments and Contingencies, for further discussion.
COVID-19 Related Costs
In 2021 and 2020, the Company recorded $1.3 million and $1.9 million of costs, respectively, related to purchasing personal protective equipment for restaurant Team Members and Guests and providing emergency sick pay to restaurant Team Members during the pandemic.
Board and Stockholder Matters Costs
During 2021, the Company recorded an immaterial amount of board and stockholder matters costs.
During 2020, the Company recorded $2.5 million of board and stockholder matters costs primarily related to the shareholder rights plan and the recruitment and appointment of a new board member in the first quarter of 2020.
During 2019, the Company recorded $3.3 million of board and stockholder matters costs primarily related to the recruitment and appointment of the three new board members and the adoption of a shareholder rights plan.
Goodwill Impairment
The Company recognized full goodwill impairment during the first quarter of 2020 totaling $95.4 million resulting from the negative effects of COVID-19 on our business.
Severance and Executive Transition
During 2020, the Company recorded $0.9 million of severance and executive transition costs primarily related to severance costs associated with the reduction in force of restaurant support center Team Members in the first quarter of 2020.
During 2019, the Company recorded $3.5 million of severance and executive transition costs primarily related to the transition and realignment of our executive team, including the appointment of a new CEO in the third quarter of 2019.
Executive Retention
During 2019, the Company recorded $1.0 million of executive retention costs related to payments made to retain executive leadership believed to be critical to the ongoing operation of the Company during the uncertainty created following the retirement of our CEO in early April 2019 and throughout the subsequent transition period.