Annual report pursuant to Section 13 and 15(d)

Acquisitions of Red Robin Franchised Restaurants

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Acquisitions of Red Robin Franchised Restaurants
 12 Months Ended
Dec. 27, 2015
Business Combinations [Abstract]  
Acquisitions of Red Robin Franchised Restaurants
Acquisitions of Red Robin Franchised Restaurants
The Company acquires franchised restaurants from time to time. On August 31, 2015, the Company acquired one restaurant from a franchisee for $2.5 million in cash. The fair value of the net assets acquired on the acquisition date primarily comprised building and land.
On March 24, 2014, the Company acquired four restaurants from one of its U.S. franchisees with a purchase price of $8.0 million in cash. On July 14, 2014, the Company completed an acquisition of 32 Red Robin franchised restaurants, 14 in the United States and 18 in Canada, from Mach Robin, LLC and its Canadian affiliate, with a purchase price of $39.5 million in cash. During the first two quarters of 2015, the Company finalized the purchase price accounting of the 2014 acquisitions and recorded certain immaterial purchase accounting adjustments.
The pro forma impact of above acquisitions and the operating results of the acquired restaurants are not presented as the impact was not material to reported results.
The above acquisitions were accounted for using the purchase method as defined in ASC 805, Business Combinations. The goodwill arising from these acquisitions consists largely of the synergies and economies of scale expected from combining the acquired operations with the Company. The goodwill generated by the acquisitions is not amortizable for book purposes but is amortizable and deductible for tax purposes.
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 fair value measurement.