Jack In The Box 2015 Annual Report Download - page 59

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

The following table summarizes the results related to the 2013 Qdoba Closures for each fiscal year (in thousands):


Company restaurant sales
$ —
$ —
$ 28,036
Asset impairments
$ —
$ (2,170)
$ (22,239)
Future lease commitments (1)
(4,594)
(4,536)
(10,301)
Bad debt expense
(366)
—
—
Brokers commissions
(234)
(652)
—
Other exit costs
(302)
(889)
(3,075)
Operating losses
—
—
(8,961)
Loss before income tax benefit
$ (5,496)
$ (8,247)
$ (44,576)
___________________________________________
(1) Future lease commitments in 2013 are shown net of reversals for deferred rent and tenant improvement allowances of $4.3 million.
We do not expect the remaining costs to be incurred related to the closures to be material; however, the estimates we make related to our future lease
obligations, primarily sublease income, are subject to a high degree of judgment and may differ from actual sublease income due to changes in economic
conditions, desirability of the sites and other factors.
Our liability for lease commitments related to the 2013 Qdoba closures is included in accrued liabilities and other long-term liabilities in the accompanying
consolidated balance sheets and has changed as follows during fiscal year 2015 (in thousands):
Balance at September 28, 2014
$ 5,737
Adjustments
4,594
Cash payments
(6,075)
Balance at September 27, 2015
$ 4,256
In 2015, adjustments primarily relate to revisions to certain sublease and cost assumptions due to changes in market conditions as well as charges to
terminate five lease agreements. These amounts were partially offset by favorable adjustments for locations that we have subleased. The balance at September
27, 2015 relates to six locations subleased at a loss and 15 locations we are marketing for sublease. The future minimum lease payments and receipts for the
next five fiscal years and thereafter are included in the amounts disclosed in Note 8, Leases.

Refranchisings and franchisee development — The following table summarizes the number of restaurants sold to franchisees, the number of restaurants
developed by franchisees and the related (losses) gains and fees recognized in each fiscal year (dollars in thousands):



Restaurants sold to franchisees
21
37
81
New restaurants opened by franchisees
38
33
45
Initial franchise fees
$ 1,453
$ 1,886
$ 4,017
Proceeds from the sale of company-operated restaurants (1)
$ 3,951
$ 10,536
$ 30,619
Net assets sold (primarily property and equipment)
(4,283)
(5,558)
(15,680)
Goodwill related to the sale of company-operated restaurants
(47)
(170)
(629)
Other (2)
(2,760)
(6,500)
(9,670)
(Losses) gains on the sale of company-operated restaurants
(3,139)
(1,692)
4,640
Loss on anticipated sale of a Jack in the Box company-operated market (3)
—
(1,856)
—
(Losses) gains on the sale of company-operated restaurants
$ (3,139)
$ (3,548)
$ 4,640
____________________________
(1) Amounts in 2015, 2014 and 2013 include additional proceeds of $1.5 million, $2.1 million and $3.3 million, respectively, recognized upon the extension of the underlying
franchise and lease agreements related to restaurants sold in a prior year.
(2) Amounts in all years presented primarily represent impairment and lease commitment charges related to restaurants closed in connection with the sale of the related markets,
and charges for operating restaurant leases with lease commitments in excess of our sublease rental income.
F-14