FIESTA RESTAURANT GROUP, INC., 10-K filed on 2/27/2020
Annual Report
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Document and Entity Information - USD ($)
12 Months Ended
Dec. 29, 2019
Feb. 21, 2020
Jun. 30, 2019
Document And Entity Information [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 29, 2019    
Document Transition Report false    
Entity File Number 001-35373    
Entity Registrant Name FIESTA RESTAURANT GROUP, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 90-0712224    
Entity Address, Address Line One 14800 Landmark Boulevard, Suite 500    
Entity Address, City or Town Dallas    
Entity Address, State or Province TX    
Entity Address, Postal Zip Code 75254    
City Area Code 972    
Local Phone Number 702-9300    
Title of 12(b) Security Common Stock, par value $.01 per share    
Trading Symbol FRGI    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Common Stock, Shares Outstanding   25,960,757  
Entity Public Float     $ 283,559,216
Entity Central Index Key 0001534992    
Current Fiscal Year End Date --12-29    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Amendment Flag false    
Documents Incorporated by Reference Portions of the registrant's definitive Proxy Statement for Fiesta Restaurant Group, Inc.'s 2020 Annual Meeting of Stockholders, which is expected to be filed pursuant to Regulation 14A no later than 120 days after the conclusion of Fiesta Restaurant Group, Inc.'s fiscal year ended December 29, 2019, are incorporated by reference into Part III of this annual report.    
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CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Current assets:    
Cash $ 13,413 $ 5,258
Accounts receivable 7,933 8,505
Inventories 3,394 2,842
Prepaid rent 117 3,375
Income tax receivable 3,821 17,857
Prepaid expenses and other current assets 10,605 6,562
Total current assets 39,283 44,399
Property and equipment, net 211,944 231,328
Operating lease right-of-use assets 251,272 0
Goodwill 56,307 123,484
Deferred tax assets 0 10,383
Other assets 9,835 9,065
Total assets 568,641 418,659
Current liabilities:    
Current portion of long-term debt 212 108
Accounts payable 14,776 16,410
Accrued payroll, related taxes and benefits 9,866 10,086
Accrued real estate taxes 6,497 5,871
Other current liabilities 32,269 14,086
Total current liabilities 63,620 46,561
Long-term debt, net of current portion 76,823 79,636
Deferred income—sale-leaseback of real estate 0 19,899
Operating lease liabilities 256,798 0
Deferred tax liabilities 4,759 0
Other non-current liabilities 8,405 32,504
Total liabilities 410,405 178,600
Commitments and contingencies
Stockholders' equity:    
Preferred stock, $0.01 par value; 20,000,000 shares authorized, no shares issued 0 0
Common stock, $0.01 par value; 100,000,000 shares authorized, 27,461,697 and 27,259,212 shares issued, respectively, and 25,612,597 and 26,858,988 shares outstanding, respectively 271 270
Additional paid-in capital 173,132 170,290
Retained earnings 1,884 72,268
Treasury stock, at cost; 1,493,495 and 112,358 shares, respectively (17,051) (2,769)
Total stockholders' equity 158,236 240,059
Total liabilities and stockholders' equity $ 568,641 $ 418,659
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 29, 2019
Dec. 30, 2018
Statement of Financial Position [Abstract]    
Preferred stock, par value (usd per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 20,000,000 20,000,000
Common stock, par value (usd per share) $ 0.01 $ 0.01
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 27,461,697 27,259,212
Common stock, shares outstanding 25,612,597 26,858,988
Treasury stock, shares 1,493,495 112,358
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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Revenues:      
Revenues $ 660,943,000 $ 688,597,000 $ 669,132,000
Costs and expenses:      
Cost of sales 207,453,000 218,946,000 202,888,000
Restaurant wages and related expenses (including stock-based compensation expense of $195, $90, and $52, respectively) 179,178,000 188,131,000 184,742,000
Restaurant rent expense 47,805,000 36,034,000 36,936,000
Other restaurant operating expenses 91,897,000 100,828,000 98,927,000
Advertising expense 23,179,000 23,695,000 26,091,000
General and administrative (including stock-based compensation expense of $2,649, $3,379, and $3,493, respectively) 56,195,000 54,525,000 59,633,000
Depreciation and amortization 39,195,000 37,604,000 34,957,000
Pre-opening costs 972,000 1,716,000 2,118,000
Impairment and other lease charges 13,101,000 21,144,000 61,760,000
Goodwill impairment 67,909,000 0 0
Closed restaurant rent expense, net of sublease income 4,163,000 0 0
Other expense (income), net 1,041,000 (3,007,000) 2,190,000
Total operating expenses 732,088,000 679,616,000 710,242,000
Income (loss) from operations (71,145,000) 8,981,000 (41,110,000)
Interest expense 3,872,000 3,966,000 2,877,000
Income (loss) before income taxes (75,017,000) 5,015,000 (43,987,000)
Provision for (benefit from) income taxes 9,369,000 (2,772,000) (7,755,000)
Net income (loss) $ (84,386,000) $ 7,787,000 $ (36,232,000)
Earnings (loss) per common share:      
Basic (usd per share) $ (3.18) $ 0.29 $ (1.35)
Diluted (usd per share) $ (3.18) $ 0.29 $ (1.35)
Weighted average common shares outstanding:      
Basic (in shares) 26,500,356 26,890,577 26,821,471
Diluted (in shares) 26,500,356 26,894,083 26,821,471
Restaurant sales      
Revenues:      
Revenues $ 658,263,000 $ 685,925,000 $ 666,584,000
Franchise royalty revenues and fees      
Revenues:      
Revenues $ 2,680,000 $ 2,672,000 $ 2,548,000
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CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Stock-based compensation $ 2,800 $ 3,500 $ 3,500
Restaurant Wages And Related Expenses      
Stock-based compensation 195 90 52
General and Administrative Expense      
Stock-based compensation $ 2,649 $ 3,379 $ 3,493
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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Retained Earnings
Treasury Stock
Beginning balance at Jan. 01, 2017 $ 264,175 $ 267 $ 163,204 $ 100,704  
Beginning balance (in shares) at Jan. 01, 2017   26,755,640      
Increase (Decrease) in Stockholders' Equity          
Stock-based compensation 3,545   3,545    
Vesting of restricted shares (in shares)   91,818      
Vesting of restricted shares 1 $ 1 0    
Cumulative effect of adopting a new accounting standard 27   74 (47)  
Net income (loss) (36,232)     (36,232)  
Ending balance (in shares) at Dec. 31, 2017   26,847,458      
Ending balance at Dec. 31, 2017 231,516 $ 268 166,823 64,425  
Increase (Decrease) in Stockholders' Equity          
Stock-based compensation 3,469   3,469    
Vesting of restricted shares (in shares)   123,888      
Vesting of restricted shares 0 $ 2 (2)    
Cumulative effect of adopting a new accounting standard $ 56   0 56  
Purchase of treasury stock (in shares) (112,358) (112,358)      
Purchase of treasury stock $ (2,769)       $ (2,769)
Net income (loss) $ 7,787     7,787  
Ending balance (in shares) at Dec. 30, 2018 26,858,988 26,858,988      
Ending balance at Dec. 30, 2018 $ 240,059 $ 270 170,290 72,268 (2,769)
Increase (Decrease) in Stockholders' Equity          
Stock-based compensation 2,844   2,844    
Vesting of restricted shares (in shares)   134,746      
Vesting of restricted shares (1) $ 1 (2)    
Cumulative effect of adopting a new accounting standard $ 14,002     14,002  
Purchase of treasury stock (in shares) (1,381,137) (1,381,137)      
Purchase of treasury stock $ (14,282)       (14,282)
Net income (loss) $ (84,386)     (84,386)  
Ending balance (in shares) at Dec. 29, 2019 25,612,597 25,612,597      
Ending balance at Dec. 29, 2019 $ 158,236 $ 271 $ 173,132 $ 1,884 $ (17,051)
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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Operating activities:      
Net income (loss) $ (84,386,000) $ 7,787,000 $ (36,232,000)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Loss (gain) on disposals of property and equipment (6,000) (757,000) 815,000
Stock-based compensation 2,844,000 3,469,000 3,545,000
Impairment and other lease charges 13,101,000 21,144,000 61,760,000
Goodwill impairment 67,909,000 0 0
Depreciation and amortization 39,195,000 37,604,000 34,957,000
Amortization of deferred financing costs 270,000 270,000 352,000
Amortization of deferred gains from sale-leaseback transactions 0 (3,564,000) (3,602,000)
Deferred income taxes 10,888,000 6,830,000 (2,828,000)
Changes in other operating assets and liabilities:      
Accounts receivable 640,000 805,000 (1,171,000)
Prepaid expenses and other current assets 364,000 894,000 (2,015,000)
Operating lease right-of-use assets 23,780,000 0 0
Other non-current assets (1,360,000) (1,491,000) (552,000)
Accounts payable 504,000 (1,797,000) 1,046,000
Accrued payroll, related taxes and benefits (220,000) (1,690,000) (499,000)
Accrued real estate taxes 626,000 11,000 (311,000)
Other current liabilities (2,618,000) (10,583,000) (590,000)
Operating lease liabilities (19,765,000) 0 0
Other non-current liabilities (162,000) 1,358,000 3,887,000
Income tax receivable/payable 14,036,000 (6,523,000) (8,030,000)
Other (608,000) 36,000 288,000
Net cash provided by operating activities 65,032,000 53,803,000 50,820,000
Capital expenditures:      
New restaurant development (11,390,000) (21,445,000) (26,727,000)
Restaurant remodeling (2,573,000) (582,000) (3,020,000)
Other restaurant capital expenditures (19,335,000) (27,464,000) (17,410,000)
Corporate and restaurant information systems (7,949,000) (8,359,000) (8,709,000)
Total capital expenditures (41,247,000) (57,850,000) (55,866,000)
Proceeds from disposals of properties 1,774,000 4,743,000 374,000
Proceeds from insurance recoveries 42,000 983,000 0
Net cash used in investing activities (39,431,000) (52,124,000) (55,492,000)
Financing activities:      
Borrowings on revolving credit facility 32,000,000 26,000,000 91,000,000
Repayments on revolving credit facility (35,000,000) (23,000,000) (85,900,000)
Principal payments on finance/capital leases (164,000) (101,000) (88,000)
Financing costs associated with issuance of debt 0 (150,000) (937,000)
Payments to purchase treasury stock (14,282,000) (2,769,000) 0
Net cash provided by (used in) financing activities (17,446,000) (20,000) 4,075,000
Net change in cash 8,155,000 1,659,000 (597,000)
Cash, beginning of year 5,258,000 3,599,000 4,196,000
Cash, end of year 13,413,000 5,258,000 3,599,000
Supplemental disclosures:      
Interest paid on long-term debt (including capitalized interest of $247, $377 and $256, respectively) 4,395,000 3,508,000 2,363,000
Interest paid on lease financing obligations 0 0 83,000
Accruals for capital expenditures 4,097,000 6,191,000 8,409,000
Income tax payments (refunds), net (15,557,000) (3,081,000) 3,103,000
Finance/capital lease obligations incurred 495,000 322,000 0
Non-cash reduction of lease financing obligations 0 0 1,664,000
Non-cash reduction of assets under lease financing obligations $ 0 $ 0 $ 1,193,000
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Statement of Cash Flows [Abstract]      
Capitalized interest $ 247 $ 377 $ 256
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Basis of Presentation
12 Months Ended
Dec. 29, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation Basis of Presentation
Business Description. Fiesta Restaurant Group, Inc. ("Fiesta Restaurant Group" or "Fiesta") owns, operates and franchises two fast-casual restaurant brands through its wholly-owned subsidiaries Pollo Operations, Inc., and its subsidiaries, and Pollo Franchise, Inc., (collectively "Pollo Tropical") and Taco Cabana, Inc. and its subsidiaries (collectively "Taco Cabana"). Unless the context otherwise requires, Fiesta and its subsidiaries, Pollo Tropical and Taco Cabana, are collectively referred to as the "Company." At December 29, 2019, the Company owned and operated 142 Pollo Tropical® restaurants and 164 Taco Cabana® restaurants. All of the Company-owned Pollo Tropical restaurants are located in Florida, and all of the Company-owned Taco Cabana restaurants are located in Texas. At December 29, 2019, Fiesta franchised a total of 32 Pollo Tropical restaurants and eight Taco Cabana restaurants. The franchised Pollo Tropical restaurants include 17 in Puerto Rico, four in Panama, two in Guyana, one in Ecuador, one in the Bahamas, and six on college campuses and one at a hospital in Florida. The franchised Taco Cabana restaurants include six in New Mexico and two on college campuses in Texas.
Basis of Consolidation. The consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
Fiscal Year. The Company uses a 5253 week fiscal year ending on the Sunday closest to December 31. The fiscal years ended December 29, 2019; December 30, 2018; and December 31, 2017, each contained 52 weeks.
Use of Estimates. The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include: insurance liabilities, evaluation for impairment of goodwill and long-lived assets, lease accounting matters, and deferred income tax assets. Actual results could differ from those estimates.
Concentrations of Risk. Food and supplies are ordered from approved suppliers and are shipped to the restaurants via distributors. Performance Food Group, Inc. is the primary distributor of food and beverage products and supplies for both Pollo Tropical and Taco Cabana. In the twelve months ended December 29, 2019, and December 30, 2018, Performance Food Group, Inc. accounted for approximately 85% and 74%, respectively, of the food and supplies delivered to restaurants. The Company's limited distributor relationships could have an adverse effect on the Company's operations.
Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Inventories. Inventories, primarily consisting of food and paper, are stated at the lower of cost (first-in, first-out) or market.
Property and Equipment. The Company capitalizes all direct costs incurred to construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Property and equipment is recorded at cost. Application development stage costs for significant internally developed software projects are capitalized and amortized. Repairs and maintenance activities are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Buildings and improvements
5
to
30 years
Equipment
3
to
7 years
Computer hardware and software
3
to
7 years
Assets subject to finance lease
Shorter of useful life or lease term

Leasehold improvements, including new buildings constructed on leased land, are depreciated over the shorter of their estimated useful lives or the underlying lease term. In circumstances where an economic penalty would be presumed by the non-exercise of one or more renewal options under the lease, the Company includes those renewal option periods when determining the lease term for depreciation purposes. For significant leasehold improvements made during the latter part of the lease term, the Company amortizes those improvements over the shorter of their useful life or an extended lease term. The extended lease term would consider the exercise of renewal options if the value of the improvements would imply that an economic penalty would be incurred
without the renewal of the option. For significant leasehold improvements made during the latter part of the lease term prior to the adoption of Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), this extended term may differ from the lease term used to determine lease assets and liabilities. Building costs incurred for new restaurants on leased land are depreciated over the lease term, which is generally a 20-year period.
Cloud-Based Computing Arrangements. The Company defers and amortizes application development stage costs for cloud-based computing arrangements over the life of the related service (subscription) agreement.
Goodwill. Goodwill represents the excess purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets acquired by Carrols Restaurant Group, Inc. ("Carrols"), Fiesta's former parent company, from the acquisition of Pollo Tropical in 1998 and Taco Cabana in 2000. Goodwill is not amortized but is assessed for impairment at least annually as of the last day of the fiscal year or more frequently if impairment indicators exist.
Long-Lived Assets. The Company assesses the recoverability of property and equipment and definite-lived intangible assets, including right-of-use ("ROU") lease assets, by determining whether the carrying value of these assets can be recovered over their respective remaining lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. See Note 5—Impairment of Long-Lived Assets.
Deferred Financing Costs. Financing costs incurred in obtaining revolving credit facilities are capitalized and amortized over the life of the related obligation as interest expense on a straight-line basis.
Leases. The Company assesses whether an agreement contains a lease at inception. Subsequent to the adoption of ASC 842, all leases are reviewed for finance or operating classification once control is obtained. The majority of the Company's leases are operating leases. Operating leases are included within operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the consolidated balance sheets. Finance leases are included within property and equipment, net, current portion of long-term debt, and long-term debt, net of current portion in the consolidated balance sheets.
ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance and is reduced by lease incentives received. As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments. Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company assumes options are reasonably certain to be exercised when such options are required to achieve a minimum 20-year lease term for new restaurant properties, and subsequent to the adoption of ASC 842, when it incurs significant leasehold improvement costs near the end of a lease term. The Company uses judgment and available data to allocate consideration in a contract when it leases land and a building. The Company also uses judgment in determining its incremental borrowing rate, which includes selecting a yield curve based on a synthetic credit rating determined using a valuation model. Lease expense for lease payments is recognized on a straight-line basis over the lease term unless the related ROU asset has been adjusted for an impairment charge. The Company has real estate lease agreements with lease and non-lease components, which are accounted for as a single lease component. See Note 7—Leases.
Income Taxes. Deferred income tax assets and liabilities are based on the difference between the financial statement and tax bases of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts for which realization is more likely than not. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
Advertising Costs. All advertising costs are expensed as incurred.
Cost of Sales. The Company includes the cost of food, beverage and paper, net of any discounts, in cost of sales. Cost of sales excludes depreciation and amortization expense, which are presented separately on the consolidated statement of operations.
Pre-opening Costs. The Company's pre-opening costs are generally incurred beginning four to six months prior to a restaurant opening and generally include restaurant employee wages and related expenses, travel expenditures, recruiting, training,
promotional costs associated with the restaurant opening and rent, including any non-cash rent expense recognized during the construction period.
Insurance.  The Company is insured for workers' compensation, general liability and medical insurance claims under policies where it pays all claims, subject to stop-loss limitations both for individual claims and for general liability, medical insurance and certain workers' compensation claims in the aggregate. Losses are accrued based upon estimates of the aggregate liability for claims based on the Company's experience and certain actuarial methods used to measure such estimates. The Company does not discount any of its self-insurance obligations.
 Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date under current market conditions. In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect management's own assumptions. The following methods were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate the fair value:
Current Assets and Liabilities. The carrying values reported on the consolidated balance sheet of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of those financial instruments.
Revolving Credit Borrowings. The fair value of outstanding revolving credit borrowings under the Company's senior credit facility, which is considered Level 2, is based on current LIBOR rates. The fair value of the Company's senior credit facility was approximately $75.0 million at December 29, 2019 and $78.0 million at December 30, 2018. The carrying value of the Company's senior credit facility was $75.0 million at December 29, 2019 and $78.0 million at December 30, 2018
See Note 5 for discussion of the fair value measurement of non-financial assets.
Revenue Recognition. Revenue is recognized upon transfer of promised products or services to customers in an amount that reflects the consideration the Company received in exchange for those products or services. Revenues from the Company's owned and operated restaurants are recognized when payment is tendered at the time of sale. Franchise royalty revenues are based on a percent of gross sales and are recorded as income when earned. Initial franchise fees and area development fees associated with new franchise agreements are not distinct from the continuing rights and services offered by the Company during the term of the related franchise agreements and are recognized as income over the term of the related franchise agreements. A portion of the initial franchise fee is allocated to training services and is recognized as revenue when the Company completes the training services. Prior to adopting Accounting Standards Codification Topic 606 ("Topic 606"), the Company recognized initial franchise fees as revenue in the period that a franchised location opened for business. See Note 11—Business Segment Information.
Gift cards. The Company sells gift cards to its customers in its restaurants and through select third parties. The Company recognizes revenue from gift cards upon redemption by the customer. For unredeemed gift cards that the Company expects to be entitled to breakage, the Company recognizes expected breakage as revenue in proportion to the pattern of redemption by the customers. The gift cards have no stated expiration dates. Revenues from unredeemed gift cards and gift card liabilities, which are recorded in other current liabilities, are not material to the Company's financial statements. Prior to adopting Topic 606, the Company did not recognize breakage on its gift cards.
Guidance Adopted in 2019. In February 2016, and in subsequent updates, the Financial Accounting Standards Board ("FASB") issued ASC 842, which requires lessee recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The Company adopted this new accounting standard and all the related amendments as of December 31, 2018 using the modified retrospective method, with certain optional practical expedients including the transition practical expedient package, which among other things does not require reassessment of lease classification. The Company elected the transition method that allows it to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative period information has not been restated and continues to be reported under the accounting standard in effect for that period.
The Company has recognized lease liabilities and corresponding right-of-use ("ROU") lease assets for substantially all of the leases it previously accounted for as operating leases, including leases related to closed restaurant properties. The initial ROU assets were calculated as the present value of the remaining operating lease payments using the Company's incremental borrowing rate as of December 31, 2018, reduced by accrued occupancy costs such as certain closed-restaurant lease reserves, accrued rent (including accruals to expense operating lease payments on a straight-line basis), unamortized lease incentives and any unamortized
sale-leaseback gains that resulted from off-market terms and increased by unamortized lease acquisition costs. Upon the adoption of ASC 842, the Company no longer records closed restaurant lease reserves, and ROU lease assets are reviewed for impairment with the Company's long-lived assets.
The Company elected the practical expedient to combine lease and non-lease components of real estate contracts, which resulted in classification of certain occupancy related expenses that are included in other restaurant operating expenses for periods prior to the adoption of ASC 842 as restaurant rent expenses in the consolidated statement of operations for periods subsequent to the adoption of ASC 842. The Company separately presents rent expense related to its closed restaurant locations and any sublease income related to these closed restaurant locations within closed restaurant rent expense, net of sublease income in the consolidated statement of operations for periods subsequent to the adoption of ASC 842.
The Company recorded an initial adjustment to the opening balance of retained earnings of $14.0 million associated with previously deferred gains on sale-leaseback transactions and impairment of operating lease right-of-use assets as of the date of adoption. This adjustment consisted of $18.6 million in deferred gains on sale-leaseback transactions, net of a related deferred tax asset of $4.3 million and $0.2 million in impairment charges, net of tax. For any future sale-leaseback transactions, the gain (adjusted for any off-market terms) will be recognized immediately.
In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates the requirement to calculate the implied fair value of goodwill if the fair value of a reporting unit is less than the carrying amount of the reporting unit. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. In 2019, the Company early adopted this new accounting standard and performed its interim impairment tests in accordance with ASU 2017-04. In the second quarter of 2019, the Company recognized a $46.5 million impairment of its Taco Cabana reporting unit goodwill, which represents the excess of the reporting unit's carrying value over its fair value at June 30, 2019. In the third quarter of 2019, the Company recognized a $21.4 million impairment of its Taco Cabana reporting unit goodwill. In the third quarter of 2019, the excess of the Taco Cabana reporting unit's carrying value over its fair value was greater than the balance of the reporting unit's goodwill, resulting in a full impairment of the Taco Cabana reporting unit's goodwill. See Note 4—Goodwill.
Recent Accounting Pronouncements. In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance will be effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted and may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company does not expect the standard to have a material effect on its financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), which is a part of the Simplification Initiative being undertaken by the FASB to reduce complexity of accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions, the most notable for the Company being the exception to the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss for the full year. The guidance will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted and any adjustments should be reflected as of the beginning of the annual period of adoption. Amendments relevant to the Company should be applied on a prospective basis. The Company is still evaluating the impact the standard will have on its financial statements.
v3.19.3.a.u2
Prepaid Expenses and Other Current Assets
12 Months Ended
Dec. 29, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Prepaid Expenses and Other Current Assets Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets, consist of the following:
 
December 29, 2019
 
December 30, 2018
Prepaid contract expenses
$
4,410

 
$
4,232

Assets held for sale(1)
4,110

 

Other
2,085

 
2,330

 
$
10,605

 
$
6,562

(1)
One closed Pollo Tropical restaurant and two closed Taco Cabana restaurant properties owned by the Company were classified as held for sale as of December 29, 2019.
v3.19.3.a.u2
Property and Equipment
12 Months Ended
Dec. 29, 2019
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment consisted of the following:
 
December 29, 2019
 
December 30, 2018
Land and land improvements
$
21,051

 
$
20,428

Owned buildings
13,978

 
15,205

Leasehold improvements (1)
212,413

 
207,206

Equipment
219,610

 
214,674

Assets subject to capital/finance leases
2,713

 
1,905

 
469,765

 
459,418

Less accumulated depreciation and amortization
(257,821
)
 
(228,090
)
 
$
211,944

 
$
231,328


(1)
Leasehold improvements include the cost of new buildings constructed on leased land.
Assets subject to capital/finance leases primarily pertain to buildings leased for certain restaurant locations and fleet vehicles, and had accumulated amortization at December 29, 2019, and December 30, 2018, of $1.3 million and $1.1 million, respectively.
Depreciation and amortization expense for all property and equipment for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $39.2 million, $37.6 million, and $35.0 million, respectively.
v3.19.3.a.u2
Goodwill
12 Months Ended
Dec. 29, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill Goodwill
The Company is required to review goodwill for impairment annually or more frequently when events and circumstances indicate that the carrying amount may be impaired. If the determined fair value of goodwill is less than the related carrying amount, an impairment loss is recognized. The Company performs its annual impairment assessment as of the last day of the fiscal year and has determined its reporting units to be its operating segments, Pollo Tropical and Taco Cabana.
There were no changes in goodwill or goodwill impairment losses recorded during the years ended December 30, 2018, and December 31, 2017.
In performing its goodwill impairment test as of December 30, 2018, the Company compared the net book values of its reporting units to their estimated fair values, the latter determined by employing an income-based discounted cash flow analysis approach and a market-based approach, which was corroborated with other value indicators where available, such as comparable company earnings multiples.
As of June 30, 2019, the Company determined that a triggering event had occurred due to a sustained decrease in the market price of the Company's common stock. In response to the triggering event, the Company performed a quantitative impairment test
for both the Pollo Tropical and Taco Cabana reporting units. Fair value for each reporting unit was determined using a combination of the income-based approach and two market-based approaches. Based on the impairment test analysis, the fair value of the Pollo Tropical reporting unit substantially exceeded its carrying amount, while the carrying amount for the Taco Cabana reporting unit exceeded its estimated fair value, which indicated an impairment of the Taco Cabana reporting unit. Lower than expected profitability and a lower profitability and growth outlook for the Taco Cabana reporting unit reduced its income-based and market-based approach fair value. The Company early adopted ASU 2017-04, which eliminates Step 2 from the goodwill impairment test, and requires recognition of an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, limited to the carrying value of the reporting unit's goodwill. In the second quarter of 2019, the Company recorded an impairment charge on the goodwill of its Taco Cabana reporting unit of $46.5 million, which represented the excess of the reporting unit's carrying value over its fair value at June 30, 2019, and which was not deductible for tax purposes.
In addition, in response to a further decrease in the market price of the Company's common stock and lower than expected profitability in the third quarter of 2019, the Company performed a quantitative impairment test for both the Pollo Tropical and Taco Cabana reporting units as of September 29, 2019. Based on the impairment test analysis, which utilized the same approach used in the second quarter of 2019, the fair value of the Pollo Tropical reporting unit continued to substantially exceed its carrying amount, while the carrying amount for the Taco Cabana reporting unit exceeded its estimated fair value. In the third quarter of 2019, the Company recorded an impairment charge on the goodwill of its Taco Cabana reporting unit of $21.4 million, of which $9.1 million was deductible for tax purposes and resulted in an income tax benefit of $2.1 million. The excess of the Taco Cabana reporting unit's carrying value over its fair value was greater than the balance of the reporting unit's goodwill, resulting in a full impairment of the Taco Cabana reporting unit's goodwill.
The Company's annual goodwill impairment assessment as of December 29, 2019, was performed using a qualitative assessment, which included examining key events and circumstances affecting fair value and indicated that it is more likely than not that the Pollo Tropical reporting unit's fair value is greater than its carrying value. There were no changes in goodwill or goodwill impairment losses for the Pollo Tropical reporting unit recorded during the year ended December 29,2019.
A summary of changes in goodwill during the twelve months ended December 29, 2019, is as follows:
 
Pollo
Tropical
 
Taco
Cabana
 
Total
Balance, December 30, 2018
$
56,307

 
$
67,177

 
$
123,484

Impairment charges(1)(2)

 
(67,177
)
 
(67,177
)
Balance, December 29, 2019
$
56,307

 
$

 
$
56,307

(1)  
Accumulated impairment losses at December 29, 2019, were $67.2 million. There were no accumulated impairment losses at December 30, 2018.
(2)
Impairment charges during the twelve months ended December 29, 2019, include $0.7 million previously classified as an intangible asset and included in other assets.
v3.19.3.a.u2
Impairment of Long-Lived Assets and Other Lease Charges
12 Months Ended
Dec. 29, 2019
Restructuring and Related Activities [Abstract]  
Impairment of Long-Lived Assets and Other Lease Charges Impairment of Long-Lived Assets and Other Lease Charges
The Company reviews its long-lived assets, principally property and equipment and lease ROU assets, for impairment at the restaurant level. The Company has elected to exclude operating lease payments and liabilities from future cash flows and carrying values, respectively, in its impairment review. In addition to considering management's plans, known regulatory or governmental actions and damage due to acts of God (hurricanes, tornadoes, etc.), the Company considers a triggering event to have occurred related to a specific restaurant if the restaurant's cash flows, exclusive of operating lease payments, for the last twelve months are less than a minimum threshold or if consistent levels of cash flows for the remaining lease period are less than the carrying value of the restaurant's assets. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows, exclusive of operating lease payments, over the life of the primary asset for each restaurant is compared to that long-lived asset group's carrying value, excluding operating lease liabilities. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis. If actual performance does not achieve the projections, the Company may recognize impairment charges in future periods, and such charges could be material. Prior to the adoption of ASC 842 on December 31, 2018, for closed restaurant locations, the Company reviewed the future minimum lease payments and related ancillary costs from
the date of the restaurant closure to the end of the remaining lease term and recorded a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries.
A summary of impairment on long-lived assets and other lease charges recorded by segment is as follows:
 
Year Ended
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Pollo Tropical
$
15

 
$
13,587

 
$
57,947

Taco Cabana
13,086

 
7,557

 
3,813

 
$
13,101

 
$
21,144

 
$
61,760


On April 24, 2017, the Company announced a Strategic Renewal Plan (the "Plan") to drive long-term shareholder value creation that included the closure of 30 Pollo Tropical restaurants outside its core Florida markets. In September 2017, the Company also closed the six remaining Pollo Tropical restaurants in south Texas. In December 2017, the Company closed four additional underperforming Pollo Tropical restaurants in Atlanta, Georgia. Six Pollo Tropical restaurants that were closed in 2016 and 2017 in Texas were rebranded as Taco Cabana restaurants in 2017 and 2018 and one Pollo Tropical restaurant was rebranded as a Taco Cabana location in 2019. In December 2018, based on a restaurant portfolio examination, the Company closed 14 Pollo Tropical restaurants including all the remaining restaurants in Atlanta, Georgia, and nine Taco Cabana restaurants. The Company also closed six Taco Cabana restaurants in 2017 in conjunction with the Plan, two Taco Cabana restaurants in the second quarter of 2018 as a result of the sale of a property and a lease termination, one Taco Cabana restaurant in the fourth quarter of 2019 as a result of a lease termination, and 19 Taco Cabana restaurants in January 2020 as a result of a restaurant portfolio review.
Impairment and other lease charges for the twelve months ended December 29, 2019, consisted of impairment charges for Pollo Tropical and Taco Cabana restaurants of $0.8 million and $13.2 million, respectively, and net lease charge recoveries for Pollo Tropical and Taco Cabana restaurants of $(0.8) million and $(0.1) million, respectively. Impairment charges in 2019, which also included right-of-use asset impairment, were related primarily to 19 Taco Cabana restaurants that were subsequently closed in 2020, five of which were initially impaired in prior years, as well as previously closed Pollo Tropical restaurants and other underperforming Taco Cabana restaurants that the Company continues to operate. Net lease charge recoveries in 2019 were related primarily to lease terminations for previously closed restaurants.
Impairment and other lease charges for the twelve months ended December 30, 2018, consisted of impairment charges for Pollo Tropical and Taco Cabana restaurants of $13.1 million and $6.0 million, respectively, and lease and other charges for Pollo Tropical and Taco Cabana restaurants (as well as a Taco Cabana office location) of $0.5 million and $1.6 million, respectively, net of recoveries. Impairment charges in 2018 were related primarily to 14 Pollo Tropical restaurants that were closed in 2018, two of which were initially impaired in 2017, nine Taco Cabana restaurants that were closed in 2018, one of which was initially impaired in 2017, and one Pollo Topical restaurant and six Taco Cabana restaurants the Company continued to operate. Other lease charges, net of recoveries, in 2018 were related primarily to restaurants and an office location that were closed in 2018 as well as previously closed restaurants.
Impairment and other lease charges for the twelve months ended December 31, 2017, consisted of impairment charges for Pollo Tropical and Taco Cabana restaurants and an office location of $52.1 million, $1.9 million, and $0.2 million, respectively, and lease and other charges for Pollo Tropical and Taco Cabana restaurants and an office location of $5.4 million, $1.6 million, and $0.5 million, respectively, net of recoveries. Impairment charges in 2017 were related primarily to 40 Pollo Tropical restaurants that were closed in 2017, seven of which were initially impaired in 2016, six Taco Cabana restaurants that were closed in 2017, four of which were initially impaired in 2016, and two Pollo Topical restaurants and five Taco Cabana restaurants the Company continued to operate. Impairment charges in 2017 also included charges with respect to an office location that was closed in December 2017. Other lease charges, net of recoveries, in 2017 were related primarily to restaurants and an office location that were closed in 2017 as well as previously closed restaurants.
The Company determined the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions, the Company's history of using these assets in the operation of its business and the Company's expectation of how a market participant would value the assets. In addition, for those restaurants reviewed for impairment where the Company owns the land and building, the Company utilized third-party information such as a broker quoted value to determine the fair value of the property. The Company also utilized discounted future cash flows to determine the fair value of assets for certain leased restaurants with positive discounted projected future cash flows. The Company utilized current market lease rent and discount rates to determine the fair value of right-of-use lease assets. These fair value asset measurements rely on significant
unobservable inputs and are considered Level 3 in the fair value hierarchy. The Level 3 assets measured at fair value associated with impairment charges recorded during the twelve months ended December 29, 2019, and December 30, 2018, totaled $5.8 million and $8.0 million, respectively.
v3.19.3.a.u2
Other Liabilities
12 Months Ended
Dec. 29, 2019
Other Liabilities Disclosure [Abstract]  
Other Liabilities Other Liabilities
Other current liabilities consist of the following:
 
December 29, 2019
 
December 30, 2018
Operating lease liabilities
$
22,338

 
$

Accrued workers' compensation and general liability claims
4,354

 
4,886

Sales and property taxes
1,889

 
1,958

Accrued occupancy costs
891

 
4,554

Other
2,797

 
2,688

 
$
32,269

 
$
14,086


Other non-current liabilities consist of the following:
 
December 29, 2019
 
December 30, 2018
Accrued occupancy costs
$
78

 
$
21,534

Accrued workers' compensation and general liability claims
7,348

 
6,808

Deferred compensation
424

 
867

Other
555

 
3,295

 
$
8,405

 
$
32,504


At December 30, 2018 accrued occupancy costs included obligations pertaining to closed restaurant locations and accruals to expense operating lease rental payments on a straight-line basis over the lease term. As a result of adopting ASC 842 on December 31, 2018, at December 29, 2019, accrued occupancy costs primarily consisted of obligations pertaining to closed restaurant locations.
The following table presents the activity in the closed restaurant reserve, of which $0.1 million and $4.4 million are included in non-current liabilities at December 29, 2019 and December 30, 2018, respectively, with the remainder in other current liabilities.
 
Year Ended
 
December 29, 2019
 
December 30, 2018
Balance, beginning of period
$
8,819

 
$
12,994

Provisions for restaurant closures

 
2,228

Additional lease charges (recoveries), net

 
(152
)
Payments, net
(1,405
)
 
(6,778
)
Other adjustments(1)
(6,662
)
 
527

Balance, end of period
$
752

 
$
8,819


(1)
As a result of adopting ASC 842 on December 31, 2018, the portion of the closed restaurant reserve related to operating lease rental payments totaling $6.0 million was reclassified and included as a component of the related ROU assets during the twelve months ended December 29, 2019. The portion of the closed restaurant reserve related to variable ancillary lease costs was not reclassified and was not included as a reduction to ROU assets.
v3.19.3.a.u2
Leases
12 Months Ended
Dec. 29, 2019
Leases [Abstract]  
Leases Leases
The Company utilizes land and buildings in its operations under various operating and finance lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for 20 years and, in many cases, provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's leases have remaining lease terms of 0.3 years to 21.8 years. Some of the Company's leases include options to extend the lease for up to 40 years. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. Variable lease payments included in rent expense consist of such contingent rent, certain rent payments based on changes in an index and certain occupancy related costs, such as variable common area maintenance expense and property taxes. The Company is not subject to residual value guarantees under any of the lease agreements. Many of the Company's real estate leases contain usage restrictions, but its leases do not contain financial covenants and restrictions.
Lease expense consisted of the following:
 
 
Twelve Months Ended
 
 
December 29, 2019
Operating lease cost
 
$
45,414

 
 
 
Finance lease costs:
 
 
Amortization of right-of-use assets
 
$
202

Interest on lease liabilities
 
226

Total finance lease costs
 
$
428

 
 
 
Variable lease costs
 
12,050

Sublease income
 
(4,037
)
Total lease costs
 
$
53,855


Supplemental balance sheet information related to leases is as follows:
 
December 29, 2019
Operating Leases
 
Operating lease right-of-use assets
$
251,272

 
 
Other current liabilities
$
22,338

Operating lease liabilities
256,798

Total operating lease liabilities
$
279,136

 
 
Finance Leases
 
Property and equipment, gross
$
2,713

Accumulated amortization
(1,323
)
Property and equipment, net
$
1,390

 
 
Current portion of long-term debt
$
212

Long-term debt, net of current portion
1,823

Total finance lease liabilities
$
2,035

Weighted Average Remaining Lease Term (in Years)
 
Operating leases
12.1

Finance leases
7.9

 
 
Weighted Average Discount Rate
 
Operating leases
7.67
%
Finance leases
12.67
%

Supplemental cash flow information related to leases is as follows:
 
Twelve Months Ended
 
December 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows for operating leases
$
41,216

Operating cash flows for finance leases
226

Financing cash flows for finance leases
164

 
 
Right-of-use assets obtained in exchange for lease liabilities:
 
Operating lease ROU assets
12,654

Finance lease ROU assets
495

 
 
Right-of-use assets and lease liabilities reduced for terminated leases:
 
Operating lease ROU assets
4,372

Operating lease liabilities
5,126

 
 
Operating lease right-of-use assets obtained and liabilities incurred as a result of adoption of ASC 842:
 
Operating lease ROU assets
267,743

Operating lease liabilities
291,373


Maturities of lease liabilities were as follows:
 
Operating Leases
 
Finance Leases
2020
$
42,479

 
$
434

2021
40,189

 
475

2022
38,917

 
475

2023
35,742

 
428

2024
32,481

 
350

Thereafter
251,977

 
1,278

Total lease payments
441,785

 
3,440

Less amount representing interest
(162,649
)
 
(1,405
)
Total discounted lease liabilities
279,136

 
2,035

Less current portion
(22,338
)
 
(212
)
Long-term portion of lease liabilities
$
256,798

 
$
1,823


As of December 29, 2019, the Company had five additional operating leases for restaurant properties. These operating leases will commence in fiscal year 2020 with each lease having an initial lease term of 15 years.
Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
 
Operating
 
Capital
2019
$
44,427

 
$
323

2020
44,144

 
327

2021
41,396

 
342

2022
40,215

 
342

2023
36,587

 
349

Thereafter
264,704

 
1,646

Total minimum lease payments(1)
$
471,473

 
3,329

Less amount representing interest
 
 
(1,585
)
Total obligations under capital leases
 
 
1,744

Less current portion
 
 
(108
)
Long-term debt under capital leases
 
 
$
1,636

(1)
Minimum operating lease payments include contractual rent payments for closed restaurants for which the Company is still obligated under the lease agreements and have not been reduced by minimum sublease rent of $41.4 million due in the future under non-cancelable subleases. See Note 6—Other Liabilities.
The Company subleases land and buildings related to closed restaurant locations and a closed office location under various operating sublease agreements. Initial sublease terms are generally for the period of time remaining on the head lease term and, in some cases, subleases provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's subleases have remaining sublease terms of 2.3 years to 19.4 years. Some of the Company's subleases include options to extend the lease for up to 25 years. Variable lease payments included in sublease income consist of certain occupancy related costs, such as variable common area maintenance expense and property taxes where the Company makes the real estate payment and is reimbursed by the lessee. The sublease agreements do not include residual value guarantees. Consistent with the Company's real estate leases, many of the subleases contain usage restrictions, but its subleases do not contain financial covenants and restrictions.
The undiscounted cash flows to be received under operating subleases were as follows:
 
Operating Leases
2020
$
4,651

2021
4,878

2022
4,833

2023
4,828

2024
4,884

Thereafter
45,031

Total
$
69,105


Total rent expense on operating leases, including contingent rentals, prior to the adoption of ASC 842 was as follows:
 
Year Ended
 
December 30, 2018
 
December 31, 2017
Minimum rent on real property, excluding rent included in pre-opening costs
$
35,881

 
$
36,760

Additional rent based on percentage of sales
153

 
176

Restaurant rent expense
36,034

 
36,936

Rent included in pre-opening costs
861

 
856

Administrative and equipment rent
850

 
988

 
$
37,745

 
$
38,780


Leases Leases
The Company utilizes land and buildings in its operations under various operating and finance lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for 20 years and, in many cases, provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's leases have remaining lease terms of 0.3 years to 21.8 years. Some of the Company's leases include options to extend the lease for up to 40 years. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. Variable lease payments included in rent expense consist of such contingent rent, certain rent payments based on changes in an index and certain occupancy related costs, such as variable common area maintenance expense and property taxes. The Company is not subject to residual value guarantees under any of the lease agreements. Many of the Company's real estate leases contain usage restrictions, but its leases do not contain financial covenants and restrictions.
Lease expense consisted of the following:
 
 
Twelve Months Ended
 
 
December 29, 2019
Operating lease cost
 
$
45,414

 
 
 
Finance lease costs:
 
 
Amortization of right-of-use assets
 
$
202

Interest on lease liabilities
 
226

Total finance lease costs
 
$
428

 
 
 
Variable lease costs
 
12,050

Sublease income
 
(4,037
)
Total lease costs
 
$
53,855


Supplemental balance sheet information related to leases is as follows:
 
December 29, 2019
Operating Leases
 
Operating lease right-of-use assets
$
251,272

 
 
Other current liabilities
$
22,338

Operating lease liabilities
256,798

Total operating lease liabilities
$
279,136

 
 
Finance Leases
 
Property and equipment, gross
$
2,713

Accumulated amortization
(1,323
)
Property and equipment, net
$
1,390

 
 
Current portion of long-term debt
$
212

Long-term debt, net of current portion
1,823

Total finance lease liabilities
$
2,035

Weighted Average Remaining Lease Term (in Years)
 
Operating leases
12.1

Finance leases
7.9

 
 
Weighted Average Discount Rate
 
Operating leases
7.67
%
Finance leases
12.67
%

Supplemental cash flow information related to leases is as follows:
 
Twelve Months Ended
 
December 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows for operating leases
$
41,216

Operating cash flows for finance leases
226

Financing cash flows for finance leases
164

 
 
Right-of-use assets obtained in exchange for lease liabilities:
 
Operating lease ROU assets
12,654

Finance lease ROU assets
495

 
 
Right-of-use assets and lease liabilities reduced for terminated leases:
 
Operating lease ROU assets
4,372

Operating lease liabilities
5,126

 
 
Operating lease right-of-use assets obtained and liabilities incurred as a result of adoption of ASC 842:
 
Operating lease ROU assets
267,743

Operating lease liabilities
291,373


Maturities of lease liabilities were as follows:
 
Operating Leases
 
Finance Leases
2020
$
42,479

 
$
434

2021
40,189

 
475

2022
38,917

 
475

2023
35,742

 
428

2024
32,481

 
350

Thereafter
251,977

 
1,278

Total lease payments
441,785

 
3,440

Less amount representing interest
(162,649
)
 
(1,405
)
Total discounted lease liabilities
279,136

 
2,035

Less current portion
(22,338
)
 
(212
)
Long-term portion of lease liabilities
$
256,798

 
$
1,823


As of December 29, 2019, the Company had five additional operating leases for restaurant properties. These operating leases will commence in fiscal year 2020 with each lease having an initial lease term of 15 years.
Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
 
Operating
 
Capital
2019
$
44,427

 
$
323

2020
44,144

 
327

2021
41,396

 
342

2022
40,215

 
342

2023
36,587

 
349

Thereafter
264,704

 
1,646

Total minimum lease payments(1)
$
471,473

 
3,329

Less amount representing interest
 
 
(1,585
)
Total obligations under capital leases
 
 
1,744

Less current portion
 
 
(108
)
Long-term debt under capital leases
 
 
$
1,636

(1)
Minimum operating lease payments include contractual rent payments for closed restaurants for which the Company is still obligated under the lease agreements and have not been reduced by minimum sublease rent of $41.4 million due in the future under non-cancelable subleases. See Note 6—Other Liabilities.
The Company subleases land and buildings related to closed restaurant locations and a closed office location under various operating sublease agreements. Initial sublease terms are generally for the period of time remaining on the head lease term and, in some cases, subleases provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's subleases have remaining sublease terms of 2.3 years to 19.4 years. Some of the Company's subleases include options to extend the lease for up to 25 years. Variable lease payments included in sublease income consist of certain occupancy related costs, such as variable common area maintenance expense and property taxes where the Company makes the real estate payment and is reimbursed by the lessee. The sublease agreements do not include residual value guarantees. Consistent with the Company's real estate leases, many of the subleases contain usage restrictions, but its subleases do not contain financial covenants and restrictions.
The undiscounted cash flows to be received under operating subleases were as follows:
 
Operating Leases
2020
$
4,651

2021
4,878

2022
4,833

2023
4,828

2024
4,884

Thereafter
45,031

Total
$
69,105


Total rent expense on operating leases, including contingent rentals, prior to the adoption of ASC 842 was as follows:
 
Year Ended
 
December 30, 2018
 
December 31, 2017
Minimum rent on real property, excluding rent included in pre-opening costs
$
35,881

 
$
36,760

Additional rent based on percentage of sales
153

 
176

Restaurant rent expense
36,034

 
36,936

Rent included in pre-opening costs
861

 
856

Administrative and equipment rent
850

 
988

 
$
37,745

 
$
38,780


Leases Leases
The Company utilizes land and buildings in its operations under various operating and finance lease agreements. The Company does not consider any one of these individual leases material to the Company's operations. Initial lease terms are generally for 20 years and, in many cases, provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's leases have remaining lease terms of 0.3 years to 21.8 years. Some of the Company's leases include options to extend the lease for up to 40 years. Certain leases require contingent rent, determined as a percentage of sales as defined by the terms of the applicable lease agreement. For most locations, the Company is obligated for occupancy related costs including payment of property taxes, insurance and utilities. Variable lease payments included in rent expense consist of such contingent rent, certain rent payments based on changes in an index and certain occupancy related costs, such as variable common area maintenance expense and property taxes. The Company is not subject to residual value guarantees under any of the lease agreements. Many of the Company's real estate leases contain usage restrictions, but its leases do not contain financial covenants and restrictions.
Lease expense consisted of the following:
 
 
Twelve Months Ended
 
 
December 29, 2019
Operating lease cost
 
$
45,414

 
 
 
Finance lease costs:
 
 
Amortization of right-of-use assets
 
$
202

Interest on lease liabilities
 
226

Total finance lease costs
 
$
428

 
 
 
Variable lease costs
 
12,050

Sublease income
 
(4,037
)
Total lease costs
 
$
53,855


Supplemental balance sheet information related to leases is as follows:
 
December 29, 2019
Operating Leases
 
Operating lease right-of-use assets
$
251,272

 
 
Other current liabilities
$
22,338

Operating lease liabilities
256,798

Total operating lease liabilities
$
279,136

 
 
Finance Leases
 
Property and equipment, gross
$
2,713

Accumulated amortization
(1,323
)
Property and equipment, net
$
1,390

 
 
Current portion of long-term debt
$
212

Long-term debt, net of current portion
1,823

Total finance lease liabilities
$
2,035

Weighted Average Remaining Lease Term (in Years)
 
Operating leases
12.1

Finance leases
7.9

 
 
Weighted Average Discount Rate
 
Operating leases
7.67
%
Finance leases
12.67
%

Supplemental cash flow information related to leases is as follows:
 
Twelve Months Ended
 
December 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows for operating leases
$
41,216

Operating cash flows for finance leases
226

Financing cash flows for finance leases
164

 
 
Right-of-use assets obtained in exchange for lease liabilities:
 
Operating lease ROU assets
12,654

Finance lease ROU assets
495

 
 
Right-of-use assets and lease liabilities reduced for terminated leases:
 
Operating lease ROU assets
4,372

Operating lease liabilities
5,126

 
 
Operating lease right-of-use assets obtained and liabilities incurred as a result of adoption of ASC 842:
 
Operating lease ROU assets
267,743

Operating lease liabilities
291,373


Maturities of lease liabilities were as follows:
 
Operating Leases
 
Finance Leases
2020
$
42,479

 
$
434

2021
40,189

 
475

2022
38,917

 
475

2023
35,742

 
428

2024
32,481

 
350

Thereafter
251,977

 
1,278

Total lease payments
441,785

 
3,440

Less amount representing interest
(162,649
)
 
(1,405
)
Total discounted lease liabilities
279,136

 
2,035

Less current portion
(22,338
)
 
(212
)
Long-term portion of lease liabilities
$
256,798

 
$
1,823


As of December 29, 2019, the Company had five additional operating leases for restaurant properties. These operating leases will commence in fiscal year 2020 with each lease having an initial lease term of 15 years.
Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
 
Operating
 
Capital
2019
$
44,427

 
$
323

2020
44,144

 
327

2021
41,396

 
342

2022
40,215

 
342

2023
36,587

 
349

Thereafter
264,704

 
1,646

Total minimum lease payments(1)
$
471,473

 
3,329

Less amount representing interest
 
 
(1,585
)
Total obligations under capital leases
 
 
1,744

Less current portion
 
 
(108
)
Long-term debt under capital leases
 
 
$
1,636

(1)
Minimum operating lease payments include contractual rent payments for closed restaurants for which the Company is still obligated under the lease agreements and have not been reduced by minimum sublease rent of $41.4 million due in the future under non-cancelable subleases. See Note 6—Other Liabilities.
The Company subleases land and buildings related to closed restaurant locations and a closed office location under various operating sublease agreements. Initial sublease terms are generally for the period of time remaining on the head lease term and, in some cases, subleases provide for renewal options and in most cases rent escalations. As of December 29, 2019, the Company's subleases have remaining sublease terms of 2.3 years to 19.4 years. Some of the Company's subleases include options to extend the lease for up to 25 years. Variable lease payments included in sublease income consist of certain occupancy related costs, such as variable common area maintenance expense and property taxes where the Company makes the real estate payment and is reimbursed by the lessee. The sublease agreements do not include residual value guarantees. Consistent with the Company's real estate leases, many of the subleases contain usage restrictions, but its subleases do not contain financial covenants and restrictions.
The undiscounted cash flows to be received under operating subleases were as follows:
 
Operating Leases
2020
$
4,651

2021
4,878

2022
4,833

2023
4,828

2024
4,884

Thereafter
45,031

Total
$
69,105


Total rent expense on operating leases, including contingent rentals, prior to the adoption of ASC 842 was as follows:
 
Year Ended
 
December 30, 2018
 
December 31, 2017
Minimum rent on real property, excluding rent included in pre-opening costs
$
35,881

 
$
36,760

Additional rent based on percentage of sales
153

 
176

Restaurant rent expense
36,034

 
36,936

Rent included in pre-opening costs
861

 
856

Administrative and equipment rent
850

 
988

 
$
37,745

 
$
38,780


v3.19.3.a.u2
Long-term Debt
12 Months Ended
Dec. 29, 2019
Debt Disclosure [Abstract]  
Long-term Debt Long-term Debt
Long term debt at December 29, 2019, and December 30, 2018, consisted of the following:
 
December 29, 2019
 
December 30, 2018
Revolving credit facility
$
75,000

 
$
78,000

Finance/capital leases
2,035

 
1,744

 
77,035

 
79,744

Less: current portion of long-term debt
(212
)
 
(108
)
 
$
76,823

 
$
79,636


Senior Credit Facility. In November 2017, the Company entered into a senior secured revolving credit facility with a syndicate of lenders. The senior credit facility provides for aggregate revolving credit borrowings of up to $150.0 million (including up to $15.0 million available for letters of credit) and matures on November 30, 2022. The senior credit facility also provides for potential incremental increases of up to $50.0 million to the revolving credit borrowings available under the senior credit facility. On December 29, 2019, there were $75.0 million in outstanding borrowings under the senior credit facility.
Borrowings under the senior credit facility bear interest at a per annum rate, at the Company's option, equal to either (all terms as defined in the senior credit facility agreement):
1)
the Alternate Base Rate plus the applicable margin of 0.75% to 1.50% based on the Company's Adjusted Leverage Ratio (with a margin of 1.25% as of December 29, 2019), or
2)
the LIBOR Rate plus the applicable margin of 1.75% to 2.50% based on the Company's Adjusted Leverage Ratio (with a margin of 2.25% at December 29, 2019)
In addition, the senior credit facility requires the Company to pay (i) a commitment fee based on the applicable Commitment Fee rate of 0.25% to 0.35%, based on the Company's Adjusted Leverage Ratio, (with a rate of 0.30% at December 29, 2019) and the unused portion of the facility and (ii) a letter of credit participation fee based on the applicable LIBOR margin and the dollar amount of outstanding letters of credit.
All obligations under the Company's senior credit facility are guaranteed by all of the Company's material domestic subsidiaries. In general, the Company's obligations under the senior credit facility and its subsidiaries' obligations under the guarantees are secured by a first priority lien and security interest on substantially all of its assets and the assets of its material subsidiaries (including a pledge of all of the capital stock and equity interests of its material subsidiaries), other than certain specified assets, including real property owned by the Company or its subsidiaries.
The outstanding borrowings under the Company's senior credit facility are prepayable subject to breakage costs as defined in the senior credit facility agreement. The senior credit facility requires the Company to comply with customary affirmative, negative and financial covenants, including, without limitation, those limiting the Company's and its subsidiaries' ability to (i) incur indebtedness, (ii) incur liens, (iii) loan, advance, or make acquisitions and other investments or other commitments to construct, acquire or develop new restaurants (subject to certain exceptions), (iv) pay dividends, (v) redeem and repurchase equity interests
(subject to certain exceptions), (vi) conduct asset and restaurant sales and other dispositions (subject to certain exceptions), (vii) conduct transactions with affiliates and (viii) change its business. In addition, the senior credit facility requires the Company to maintain certain financial ratios, including minimum Fixed Charge Coverage and maximum Adjusted Leverage Ratios (all as defined in the senior credit facility agreement).
The Company's senior credit facility contains customary default provisions, including without limitation, a cross default provision pursuant to which it is an event of default under this facility if there is a default under any of the Company's indebtedness having an outstanding principal amount of $5 million or more which results in the acceleration of such indebtedness prior to its stated maturity or is caused by a failure to pay principal when due.
As of December 29, 2019, the Company was in compliance with the financial covenants under its senior credit facility. After reserving $3.7 million for letters of credit, $71.3 million was available for borrowing under the senior credit facility at December 29, 2019.
At December 29, 2019, principal payments required on borrowings under the senior credit facility were $75.0 million in 2022. The weighted average interest rate on the borrowings under the senior credit facility was 4.04% and 4.59% at December 29, 2019, and December 30, 2018, respectively. Interest expense on the Company's long-term debt, excluding lease financing obligations, was $3.7 million, $3.9 million and $2.7 million for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively.
v3.19.3.a.u2
Income Taxes
12 Months Ended
Dec. 29, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company's income tax provision (benefit) was comprised of the following:    
 
Year Ended
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Current:
 
 
 
 
 
Federal
$
(2,347
)
 
$
(10,378
)
 
$
(5,718
)
Foreign
336

 
355

 
346

State
492

 
421

 
445

 
(1,519
)
 
(9,602
)
 
(4,927
)
Deferred:
 
 
 
 
 
Federal
(2,132
)
 
6,591

 
(1,059
)
State
(425
)
 
297

 
(1,649
)

(2,557
)
 
6,888

 
(2,708
)
Valuation allowance
13,445

 
(58
)
 
(120
)
 
$
9,369

 
$
(2,772
)
 
$
(7,755
)

Deferred income taxes reflect the effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred income tax assets and liabilities at December 29, 2019, and December 30, 2018, were as follows:
 
 
December 29, 2019
 
December 30, 2018
Deferred income tax assets:
 
 
 
 
  Accrued vacation benefits
 
$
875

 
$
1,017

  Incentive compensation
 
1,024

 
959

  Other accruals
 
2,804

 
2,976

  Deferred income on sale-leaseback of real estate
 

 
4,591

  Operating lease liabilities
 
65,251

 

  Occupancy costs
 
175

 
6,038

  Tax credit carryforwards
 
1,949

 
1,534

  Federal net operating loss
 
2,770

 
1,040

  Other
 
973

 
839

        Gross deferred income tax assets
 
75,821

 
18,994

Deferred income tax liabilities:
 
 
 
 
  Right-of-use operating lease assets
 
(58,524
)
 

  Property and equipment depreciation
 
(6,509
)
 
(5,438
)
  Amortization of other intangibles, net
 
(34
)
 
(2,121
)
  Cloud-based software deferred costs
 
(990
)
 

  Other
 
(400
)
 
(374
)
        Gross deferred income tax liabilities
 
(66,457
)
 
(7,933
)
  Less: Valuation allowance
 
(14,123
)
 
(678
)
Net deferred income tax assets
 
$
(4,759
)
 
$
10,383


The Company establishes a valuation allowance to reduce the carrying amount of deferred income tax assets when it is more likely than not that it will not realize some portion or all of the tax benefit of its deferred tax assets. The Company evaluates whether its deferred income tax assets are probable of realization on a quarterly basis. In performing this analysis, the Company considers all available positive and negative evidence including historical operating results, the estimated timing of future reversals of existing taxable temporary differences and, when appropriate, estimated future taxable income exclusive of reversing temporary differences and carryforwards. In the fourth quarter of 2019, the Company determined that it is more likely than not that its deferred tax assets will not be fully realized in future periods and established a valuation allowance of $10.3 million against federal deferred tax assets and $3.2 million against state deferred tax assets. At December 29, 2019, the Company had a valuation allowance of $14.1 million against deferred income tax assets where it was determined to be more likely than not that the deferred income tax assets will not be realized through the reversal of existing deferred tax liabilities. At December 30, 2018, the Company had a valuation allowance of $0.7 million against net deferred income tax assets due to foreign income tax credit carryforwards where it was determined to be more likely than not that the deferred income tax asset amounts would not be realized. The valuation allowance increased $13.4 million in 2019 as a result of establishing a valuation allowance in the fourth quarter of 2019, and decreased $0.1 million in 2018 primarily due to expired foreign income tax credits. The Company's ability to utilize deferred income tax assets and estimate future taxable income for federal and state purposes can significantly change based on future events and operating results.
The Company's effective tax rate was (12.5)%, (55.3)%, and 17.6% for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively. A reconciliation of the statutory federal income tax provision (benefit) to the effective tax provision (benefit) was as follows:
 
Year Ended
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Statutory federal income tax provision (benefit)
$
(15,753
)
 
$
1,053

 
$
(15,394
)
State income taxes, net of federal benefit
49

 
552

 
(734
)
Change in valuation allowance
13,445

 
(58
)
 
(120
)
Change in federal income tax rate and tax methods
(716
)
 
(3,977
)
 
8,952

Net share-based compensation-tax benefit deficiencies
235

 
178

 
228

Non-deductible goodwill
12,357

 

 

Non-deductible expenses
214

 
53

 
84

Foreign taxes
336

 
355

 
346

Employment tax credits
(381
)
 
(897
)
 
(914
)
Foreign tax credits/deductions
(71
)
 
(75
)
 
(121
)
Other
(346
)
 
44

 
(82
)
 
$
9,369

 
$
(2,772
)
 
$
(7,755
)

Tax Law Changes. On December 22, 2017, the Tax Cuts and Jobs Act (the "Act"), which includes a provision that reduced the federal corporate income tax rate from 35.0% to 21.0% effective January 1, 2018, was signed into law. In accordance with generally accepted accounting principles, the enactment of this new tax legislation required the Company to revalue its net deferred income tax assets at the new corporate statutory rate of 21.0% as of the enactment date, which resulted in an adjustment to its deferred income taxes of $9.0 million with a corresponding increase to the provision for income taxes as a discrete item during the fourth quarter of 2017. In 2018, in conjunction with a cost segregation study conducted prior to filing its 2017 federal income tax return, the Company changed the depreciation method for certain assets for federal income tax purposes to accelerate tax deductions. Changes in the Company's 2017 federal income tax return from the amounts recorded as of December 31, 2017 were primarily the result of changing the depreciable lives of assets for federal income tax purposes. These changes allowed the Company to record an incremental benefit of $4.0 million during the twelve months ended December 30, 2018.
The Company recognizes interest and/or penalties related to uncertain tax positions in income tax expense. As of December 29, 2019, and December 30, 2018, the Company had no unrecognized tax benefits and no accrued interest related to uncertain tax positions.
The Company has deferred tax benefits of $2.8 million related to federal net operating loss carryforwards which have no expiration date and $1.3 million related to employment tax credits which, if unutilized after various times beginning in 2038, will have a reduced value of $0.3 million. The Company also has a deferred tax benefit of $0.4 million (for which a valuation allowance has been established) related to a Florida net operating loss carryforward that has no expiration date.
The Company is currently under examination by the Internal Revenue Service for the tax years 2015–2017. It is not currently under examination by any other taxing jurisdictions. The tax years 2015–2019 remain open to examination by the taxing jurisdictions to which the Company is subject. Although it is not reasonably possible to estimate the amount by which unrecognized tax benefits may increase within the next twelve months due to uncertainties regarding the timing of any examinations, the Company does not expect unrecognized tax benefits to significantly change in the next twelve months.
v3.19.3.a.u2
Stockholders' Equity
12 Months Ended
Dec. 29, 2019
Share-based Payment Arrangement [Abstract]  
Stockholders' Equity Stockholders' Equity
Purchase of Treasury Stock
In 2018, the Company's board of directors approved a share repurchase program for up to 1,500,000 shares of the Company's common stock. In 2019, the Company's board of directors approved increases to the share repurchase program of an additional 1,500,000 shares of the Company's common stock for an aggregate approval of 3,000,000 shares of the Company's common stock. Under the share repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The share repurchase program has no time limit and may be modified, suspended, superseded or terminated at any time by the Company's board of directors. The Company repurchased 1,381,137 shares and 112,358 shares of its common stock under the program in open market transactions during the twelve months ended December 29, 2019, and December 30, 2018, for $14.3 million and $2.8 million, respectively. The repurchased shares are held as treasury stock at cost.
Stock-Based Compensation
The Company established the Fiesta Restaurant Group, Inc. 2012 Stock Incentive Plan (the "Fiesta Plan") in order to be able to compensate its employees and directors by issuing stock options, stock appreciation rights, or stock awards to them under this plan. The aggregate number of shares of stock authorized for distribution under the Fiesta Plan is 3,300,000. As of December 29, 2019, there were 1,467,699 shares available for future grants under the Fiesta Plan.
During the years ended December 29, 2019; December 30, 2018; and December 31, 2017, the Company granted certain employees, and in 2019 and 2018 a consultant, in the aggregate 243,948; 161,791; and 182,522 non-vested restricted shares, respectively, under the Fiesta Plan. Shares granted to employees during the years ended December 29, 2019; December 30, 2018; and December 31, 2017, vest and become non-forfeitable over a four-year vesting period. The shares granted to the consultant vest over a three-year vesting period. The weighted average fair value at the grant date for restricted non-vested shares issued during the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $13.06 per share, $18.70 per share, and $20.75 per share, respectively.
During the years ended December 29, 2019; December 30, 2018; and December 31, 2017, the Company granted non-employee directors 43,054; 31,146; and 38,596 non-vested restricted shares, respectively, under the Fiesta Plan. The weighted average fair value at the grant date for restricted non-vested shares issued to directors during the twelve months ended December 29, 2019; December 30, 2018; and December 31, 2017, was $12.66 per share, $20.71 per share, and $21.25 per share, respectively. These shares vest and become non-forfeitable over a one-year vesting period, or for certain grants to new directors, over a five-year vesting period.
During the year ended December 31, 2017, the Company granted certain employees 11,745 restricted stock units under the Fiesta Plan. Certain of the restricted stock units vest and become non-forfeitable over a four-year vesting period and certain of the restricted stock units vest and become non-forfeitable at the end of a four-year vesting period. The weighted average fair value at grant date for the restricted stock units issued to employees during the year ended December 31, 2017, was $20.75 per share.
Also during the years ended December 29, 2019; December 30, 2018; and December 31, 2017 the Company granted certain employees 15,348; 112,169; and 92,171 restricted stock units, respectively, under the Fiesta Plan subject to continued service requirements and market performance conditions.
During the year ended December 31, 2017, the Company granted its Chief Executive Officer 72,290 restricted stock units, which vest in four tranches over a four-year vesting period subject to continued service and attainment of specified share prices of the Company's common stock during 20 consecutive trading days at any point during each year. Each tranche vests by the end of a one-year period if the specified target stock price condition for that year is met. If the specified target stock price condition for any tranche is not met for the year, the cumulative unearned units will be rolled over to subsequent tranches on a pro rata basis. The number of shares into which these restricted stock units convert ranges from no shares, if the service and market performance conditions are not met, to 72,290 shares, if the service and market performance conditions are met in the fourth year. The weighted average fair value at grant date for these restricted stock units was $12.90 per share.
During the years ended December 30, 2018, and December 31, 2017, the Company granted certain executives 112,169 and 19,881 restricted stock units, respectively, which vest in three tranches over a three-year vesting period subject to continued service and attainment of specified share price of the Company's common stock. Each tranche vests by the end
of a one-year period if the specified target stock price condition for that year is met. If the specified target stock price condition for any tranche is not met for the year, the cumulative unearned units will be rolled over to subsequent tranches on a pro rata basis. The number of shares into which these restricted stock units convert ranges from no shares, if the service and market performance conditions are not met, to 112,169 and 19,881 shares, if the service and market performance conditions are met in the third year. The weighted average fair value at grant date for the restricted stock units granted to executives in the years ended December 30, 2018, and December 31, 2017, was $6.96 per share and $9.31 per share, respectively.
During the year ended December 29, 2019, the Company granted a certain executive 15,348 restricted stock units, which vest in two tranches over a two-year vesting period subject to continued service and attainment of specified share price of the Company's common stock. Each tranche vests by the end of a one-year period if the specified target stock price condition for that year is met. If the specified target stock price condition for the first tranche is not met for the year, the cumulative unearned units will be rolled over to the subsequent tranche. The number of shares into which these restricted stock units convert ranges from no shares, if the service and market performance conditions are not met, to 15,348 shares, if the service and market performance conditions are met in the last vesting period. The weighted average fair value at grant date for the restricted stock units granted in the year ended December 29, 2019 was $1.76 per share.
Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable requisite service period of the award (the vesting period) using the straight-line method, or for restricted stock units subject to market performance conditions using the accelerated method. Stock-based compensation expense for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $2.8 million, $3.5 million, and $3.5 million, respectively. As of December 29, 2019, the total unrecognized stock-based compensation expense related to non-vested shares and restricted stock units was approximately $4.0 million. At December 29, 2019, the remaining weighted average vesting period for non-vested restricted shares was 2.4 years and restricted stock units was 0.7 years.
A summary of all non-vested restricted shares and restricted stock units activity for the year ended December 29, 2019, is as follows:
 
Non-Vested Shares
 
Restricted Stock Units
 
Shares
 
Weighted Average Grant Date
Fair Value
 
Units
 
Weighted Average Grant Date
Fair Value
Outstanding at December 30, 2018
287,866

 
$
20.70

 
231,112

 
$
12.44

Granted
287,002

 
13.00

 
15,348

 
1.76

Vested/Released
(131,185
)
 
20.30

 
(3,516
)
 
62.05

Forfeited
(88,078
)
 
17.02

 
(66,582
)
 
15.34

Outstanding at December 29, 2019
355,605

 
$
15.47

 
176,362

 
$
9.42


The fair value of the non-vested restricted shares and all other restricted stock units is based on the closing price on the date of grant. The fair value of the restricted stock units subject to market conditions was estimated using the Monte Carlo simulation method. The assumptions used to value grant restricted stock units subject to market conditions are detailed below:
 
 
2019
 
2018
 
2017
 
 
Non-CEO Grant
 
Non-CEO Grant
 
Non-CEO Grant
 
CEO Grant
Grant date stock price
 
$
14.66

 
$
18.70

 
$
17.60

 
$
22.55

Fair value at grant date
 
$
1.76

 
$
6.96

 
$
9.31

 
$
12.90

Risk free interest rate
 
2.53
%
 
2.40
%
 
1.51
%
 
1.52
%
Expected term (in years)
 
2

 
3

 
2.5

 
3.8

Dividend yield
 
%
 
%
 
%
 
%
Expected volatility
 
43.18
%
 
41.49
%
 
41.72
%
 
39.06
%

The fair value of the shares vested and released during the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $1.8 million, $2.5 million, and $2.1 million, respectively.
v3.19.3.a.u2
Business Segment Information
12 Months Ended
Dec. 29, 2019
Segment Reporting [Abstract]  
Business Segment Information Business Segment Information
The Company owns, operates and franchises two restaurant brands, Pollo Tropical® and Taco Cabana®, each of which is an operating segment. Pollo Tropical restaurants feature fire-grilled and crispy citrus marinated chicken and other freshly prepared tropical-inspired menu items, while Taco Cabana restaurants specialize in Mexican-inspired food.
Each segment's accounting policies are the same as those described in the summary of significant accounting policies in Note 1. Prior to the second quarter of 2017, the primary measures of segment profit or loss used to assess performance and allocate resources were income (loss) before taxes and an Adjusted EBITDA measure, which was defined as earnings attributable to the applicable operating segment before interest, income taxes, depreciation and amortization, impairment and other lease charges, stock-based compensation expense and other income and expense.
In 2017, the Company's board of directors appointed a new Chief Executive Officer who initiated the Plan and uses an Adjusted EBITDA measure for the purpose of assessing performance and allocating resources to segments. The new Adjusted EBITDA measure used by the chief operating decision maker includes adjustments for significant items that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants. Beginning in the second quarter of 2017, the primary measure of segment profit or loss used by the chief operating decision maker to assess performance and allocate resources is Adjusted EBITDA, which is now defined as earnings attributable to the applicable operating segments before interest expense, income taxes, depreciation and amortization, impairment and other lease charges, goodwill impairment, closed restaurant rent expense, net of sublease income, stock-based compensation expense, other expense (income), net, and certain significant items for each segment that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants as set forth in the reconciliation table below. The Company has included the presentation of Adjusted EBITDA for all periods presented.
The "Other" column includes corporate-related items not allocated to reportable segments and consists primarily of corporate-owned property and equipment, lease assets, miscellaneous prepaid costs, capitalized costs associated with the issuance of indebtedness, corporate cash accounts, and a current income tax receivable.
Year Ended
 
Pollo Tropical
 
Taco Cabana
 
Other
 
Consolidated
December 29, 2019:
 
 
 
 
 
 
 
 
Restaurant sales
 
$
361,693

 
$
296,570

 
$

 
$
658,263

Franchise revenue
 
1,780

 
900

 

 
2,680

Cost of sales
 
115,119

 
92,334

 

 
207,453

Restaurant wages and related expenses(1)
 
84,909

 
94,269

 

 
179,178

Restaurant rent expense
 
22,050

 
25,755

 

 
47,805

Other restaurant operating expenses
 
49,768

 
42,129

 

 
91,897

Advertising expense
 
12,358

 
10,821

 

 
23,179

General and administrative expense(2)
 
31,023

 
25,172

 

 
56,195

Adjusted EBITDA
 
50,560

 
7,889

 

 
58,449

Depreciation and amortization
 
21,476

 
17,719

 

 
39,195

Capital expenditures
 
21,921

 
18,023

 
1,303

 
41,247

December 30, 2018:
 
 
 
 
 
 
 
 
Restaurant sales
 
$
374,381

 
$
311,544

 
$

 
$
685,925

Franchise revenue
 
1,815

 
857

 

 
2,672

Cost of sales
 
123,042

 
95,904

 

 
218,946

Restaurant wages and related expenses(1)
 
87,025

 
101,106

 

 
188,131

Restaurant rent expense
 
17,457

 
18,577

 

 
36,034

Other restaurant operating expenses
 
51,757

 
49,071

 

 
100,828

Advertising expense
 
13,068

 
10,627

 

 
23,695

General and administrative expense(2)
 
29,621

 
24,904

 

 
54,525

Adjusted EBITDA
 
54,903

 
13,059

 

 
67,962

Depreciation and amortization
 
21,372

 
16,232

 

 
37,604

Capital expenditures
 
27,667

 
28,886

 
1,297

 
57,850

December 31, 2017:
 
 
 
 
 
 
 
 
Restaurant sales
 
$
372,328

 
$
294,256

 
$

 
$
666,584

Franchise revenue
 
1,787

 
761

 

 
2,548

Cost of sales
 
117,493

 
85,395

 

 
202,888

Restaurant wages and related expenses(1)
 
88,587

 
96,155

 

 
184,742

Restaurant rent expense
 
18,949

 
17,987

 

 
36,936

Other restaurant operating expenses
 
52,848

 
46,079

 

 
98,927

Advertising expense
 
16,397

 
9,694

 

 
26,091

General and administrative expense(2)
 
33,025

 
26,608

 

 
59,633

Adjusted EBITDA
 
50,937

 
16,508

 

 
67,445

Depreciation and amortization
 
21,758

 
13,199

 

 
34,957

Capital expenditures
 
31,786

 
20,781

 
3,299

 
55,866

Identifiable Assets:
 
 
 
 
 
 
 
 
December 29, 2019
 
$
340,012

 
$
195,883

 
$
32,746

 
$
568,641

December 30, 2018
 
207,435

 
174,681

 
36,543

 
418,659

December 31, 2017
 
227,194

 
167,237

 
28,882

 
423,313


(1)
Includes stock-based compensation expense of $195, $90 and $52 for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively.
(2)
Includes stock-based compensation expense of $2,649, $3,379 and $3,493 for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively.
A reconciliation of consolidated net income (loss) to Adjusted EBITDA follows:
Year Ended
 
Pollo Tropical
 
Taco Cabana
 
Consolidated
December 29, 2019:
 
 
 
 
 
 
Net loss
 
 
 
 
 
$
(84,386
)
Provision for income taxes
 
 
 
 
 
9,369

Income (loss) before taxes
 
$
20,300

 
$
(95,317
)
 
$
(75,017
)
Add:
 
 
 
 
 
 
     Non-general and administrative expense adjustments:
 
 
 
 
 
 
          Depreciation and amortization
 
21,476

 
17,719

 
39,195

          Impairment and other lease charges
 
15

 
13,086

 
13,101

          Goodwill impairment
 

 
67,909

 
67,909

          Interest expense
 
1,953

 
1,919

 
3,872

          Closed restaurant rent expense, net of sublease income
 
3,260

 
903

 
4,163

          Other expense (income), net
 
862

 
179

 
1,041

          Stock-based compensation expense in restaurant wages
 
70

 
125

 
195

                Total non-general and administrative expense adjustments
 
27,636

 
101,840

 
129,476

     General and administrative expense adjustments:
 
 
 
 
 
 
          Stock-based compensation expense
 
1,590

 
1,059

 
2,649

          Restructuring costs and retention bonuses
 
827

 
137

 
964

          Digital and brand repositioning costs
 
207

 
170

 
377

               Total general and administrative expense adjustments
 
2,624

 
1,366

 
3,990

Adjusted EBITDA
 
$
50,560

 
$
7,889

 
$
58,449

 
 
 
 
 
 
 
December 30, 2018:
 
 
 
 
 
 
Net income
 
 
 
 
 
$
7,787

Benefit from income taxes
 
 
 
 
 
(2,772
)
Income (loss) before taxes
 
$
17,639

 
$
(12,624
)
 
$
5,015

Add:
 
 
 
 
 
 
     Non-general and administrative expense adjustments:
 
 
 
 
 
 
          Depreciation and amortization
 
21,372

 
16,232

 
37,604

          Impairment and other lease charges
 
13,587

 
7,557

 
21,144

          Interest expense
 
1,920

 
2,046

 
3,966

          Other expense (income), net
 
(1,225
)
 
(1,782
)
 
(3,007
)
          Stock-based compensation expense in restaurant wages
 
34

 
56

 
90

                Total non-general and administrative expense adjustments
 
35,688

 
24,109

 
59,797

     General and administrative expense adjustments:
 
 
 
 
 
 
          Stock-based compensation expense
 
1,885

 
1,494

 
3,379

          Board and shareholder matter costs
 
(328
)
 
(269
)
 
(597
)
          Restructuring costs and retention bonuses
 
196

 
349

 
545

          Legal settlements and related costs
 
(177
)
 

 
(177
)
               Total general and administrative expense adjustments
 
1,576

 
1,574

 
3,150

Adjusted EBITDA
 
$
54,903

 
$
13,059

 
$
67,962

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Year Ended:
 
Pollo Tropical
 
Taco Cabana
 
Consolidated
December 31, 2017:
 
 
 
 
 
 
Net loss
 
 
 
 
 
$
(36,232
)
Benefit from income taxes
 
 
 
 
 
(7,755
)
Loss before taxes
 
$
(37,831
)
 
$
(6,156
)
 
$
(43,987
)
Add:
 
 
 
 
 
 
     Non-general and administrative expense adjustments:
 
 
 
 
 
 
          Depreciation and amortization
 
21,758

 
13,199

 
34,957

          Impairment and other lease charges
 
57,947

 
3,813

 
61,760

          Interest expense
 
1,348

 
1,529

 
2,877

          Other expense (income), net
 
2,427

 
(237
)
 
2,190

          Stock-based compensation expense in restaurant wages
 
(4
)
 
56

 
52

          Unused pre-production costs in advertising expense
 
322

 
88

 
410

                Total non-general and administrative expense adjustments
 
83,798

 
18,448

 
102,246

     General and administrative expense adjustments:
 
 
 
 
 
 
          Stock-based compensation expense
 
1,983

 
1,510

 
3,493

          Terminated capital project
 
484

 
365

 
849

          Board and shareholder matter costs
 
1,738

 
1,311

 
3,049

          Restructuring costs and retention bonuses
 
1,390

 
1,030

 
2,420

          Office restructuring and relocation costs
 
(152
)
 

 
(152
)
          Legal settlements and related costs
 
(473
)
 

 
(473
)
               Total general and administrative expense adjustments
 
4,970

 
4,216

 
9,186

Adjusted EBITDA
 
$
50,937

 
$
16,508

 
$
67,445


v3.19.3.a.u2
Earnings (Loss) Per Share
12 Months Ended
Dec. 29, 2019
Earnings Per Share [Abstract]  
Earnings (Loss) Per Share Earnings (Loss) Per Share
Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding during each period. Non-vested restricted shares contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares and are thus considered participating securities. The impact of the participating securities is included in the computation of basic EPS pursuant to the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines earnings attributable to common shares and participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. EPS is computed by dividing undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and non-vested restricted shares based on the weighted average shares outstanding during the period.
Diluted EPS reflects the potential dilution that could occur if the restricted stock units were to be converted into common shares. Restricted stock units with performance conditions are only included in the diluted EPS calculation to the extent that performance conditions have been met at the measurement date. Diluted EPS is computed by adjusting the basic weighted average number of common shares by the dilutive effect of the restricted stock units, determined using the treasury stock method.
Weighted average outstanding restricted stock units totaling 560 shares were not included in the computation of diluted earnings per share for the twelve months ended December 30, 2018, because including these restricted stock units would have been antidilutive. For the twelve months ended December 29, 2019, and December 31, 2017, all restricted stock units outstanding were excluded from the computation of diluted earnings per share because including restricted stock units would have been antidilutive as a result of the net loss in the period.
The computation of basic and diluted EPS is as follows:
 
 
Year Ended
 
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Basic and diluted EPS:
 
 
 
 
 
 
Net income (loss)
 
$
(84,386
)
 
$
7,787

 
$
(36,232
)
Less: income allocated to participating securities
 

 
85

 

Net income (loss) available to common stockholders
 
$
(84,386
)
 
$
7,702

 
$
(36,232
)
Weighted average common shares—basic
 
26,500,356

 
26,890,577

 
26,821,471

Restricted stock units
 

 
3,506

 

Weighted average common shares—diluted
 
26,500,356

 
26,894,083

 
26,821,471

 
 
 
 
 
 
 
Earnings (loss) per common share—basic
 
$
(3.18
)
 
$
0.29

 
$
(1.35
)
Earnings (loss) per common share—diluted
 
$
(3.18
)
 
$
0.29

 
$
(1.35
)

v3.19.3.a.u2
Commitments and Contingencies
12 Months Ended
Dec. 29, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Lease Assignments. Taco Cabana has assigned two leases to various parties on properties where it no longer operates restaurants with lease terms expiring on various dates through 2029. The assignees are responsible for making the payments required by the leases. The Company is a guarantor under one of the leases, and it remains secondarily liable as a surety with respect to one of the leases. Pollo Tropical assigned one lease to a third party on a property where it no longer operates with a lease term expiring in 2033. The assignee is responsible for making the payments required by the lease. The Company is a guarantor under the lease.
The maximum potential liability for future rental payments that the Company could be required to make under these leases at December 29, 2019, was $3.2 million. The Company could also be obligated to pay property taxes and other lease related costs. The obligations under these leases will generally continue to decrease over time as the operating leases expire. The Company does not believe it is probable that it will be ultimately responsible for the obligations under these leases.
Legal Matters. The Company is a party to various legal proceedings incidental to the conduct of business. The Company does not believe that the outcome of any of these matters will have a material effect on its consolidated financial statements. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not establish an accrued liability.
Contingency Related to Insurance Recoveries. During the third quarter of 2017, Texas and Florida were struck by Hurricane Harvey and Irma (the "Hurricanes"). Forty-three Taco Cabana and two Pollo Tropical restaurants in the Houston metropolitan area and all Pollo Tropical restaurants in Florida and the Atlanta metropolitan area were temporarily closed and affected by the Hurricanes to varying degrees. In 2017, the Company recorded expected insurance proceeds of $0.7 million and $0.4 million for Pollo Tropical and Taco Cabana, respectively. In the twelve months ended December 30, 2018, the Company received business interruption and property damage insurance settlement proceeds of $2.8 million and $1.7 million, respectively, and recognized other income of $2.1 million and $1.4 million for Pollo Tropical and Taco Cabana, respectively, related to the Hurricanes. The Company has received a final settlement related to the Hurricanes as of December 30, 2018.
v3.19.3.a.u2
Retirement Plans
12 Months Ended
Dec. 29, 2019
Retirement Benefits [Abstract]  
Retirement Plans Retirement Plans
Fiesta offers the Company's salaried employees the option to participate in the Fiesta Corporation Retirement Savings Plan (the "Retirement Plan"). The Retirement Plan includes a savings option pursuant to section 401(k) of the Internal Revenue Code in addition to a post-tax savings option. Fiesta may elect to contribute to the Retirement Plan on an annual basis. Contributions made by Fiesta to the Retirement Plan for the Company's employees are made after the end of each plan year. For 2019, 2018 and 2017, Fiesta's discretionary annual contribution is equal to 50% of the employee's contribution up to the first 6% of eligible compensation for a maximum Fiesta contribution of 3% of eligible compensation per participating employee. Under the Retirement Plan, Fiesta contributions begin to vest after 1 year and fully vest after 5 years of service. A year of service is defined as a plan year during which an employee completes at least 1,000 hours of service. Participating employees may contribute up to 50% of their salary annually to either of the savings options, subject to other limitations. The employees have various investment options available under a trust established by the Retirement Plan. Retirement Plan employer matching expense for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, was $0.4 million, $0.5 million and $0.4 million respectively.
Fiesta also has a Deferred Compensation Plan which permits employees not eligible to participate in the Retirement Plan because they have been excluded as "highly compensated" employees (as so defined in the Retirement Plan) to voluntarily defer portions of their base salary and annual bonus. All amounts deferred by the participants earn interest at 8% per annum. There is no Company matching on any portion of the funds. At December 29, 2019, and December 30, 2018, a total of $0.4 million and $0.9 million, respectively, was deferred by the Company's employees under the Deferred Compensation Plan, including accrued interest.
v3.19.3.a.u2
Selected Quarterly Financial and Earnings Data (Unaudited)
12 Months Ended
Dec. 29, 2019
Quarterly Financial Information Disclosure [Abstract]  
Selected Quarterly Financial and Earnings Data (Unaudited) Selected Quarterly Financial and Earnings Data (Unaudited)
 
Year Ended December 29, 2019
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
Revenue
$
165,852

 
$
171,381

 
$
164,248

 
$
159,462

Income (loss) from operations(1)
4,469

 
(41,850
)
 
(24,305
)
 
(9,459
)
Net income (loss)(2)
2,289

 
(43,440
)
 
(22,182
)
 
(21,053
)
Earnings (loss) per common share—basic
$
0.08

 
$
(1.62
)
 
$
(0.84
)
 
$
(0.82
)
Earnings (loss) per common share—diluted
0.08

 
(1.62
)
 
(0.84
)
 
(0.82
)
 
 
 
 
 
 
 
 
 
Year Ended December 30, 2018
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
Revenue
$
169,484

 
$
176,827

 
$
174,648

 
$
167,638

Income (loss) from operations(1)
6,878

 
13,500

 
(1,921
)
 
(9,476
)
Net income (loss)(3)
4,184

 
9,493

 
2,047

 
(7,937
)
Earnings (loss) per common share—basic
$
0.15

 
$
0.35

 
$
0.08

 
$
(0.30
)
Earnings (loss) per common share—diluted
0.15

 
0.35

 
0.08

 
(0.30
)
(1)
The Company recognized impairment and other lease charges of $(0.3) million, $1.8 million, $3.3 million and $8.4 million in the first, second, third and fourth quarters of 2019, respectively, and $(0.7) million, $0.8 million, $6.4 million and $14.6 million in the first, second, third and fourth quarters of 2018, respectively. See Note 5—Impairment of Long-lived Assets and Other Lease Charges. The Company recognized goodwill impairment charges of $46.5 million (which was not tax deductible) and $21.4 million (of which $9.1 million was tax deductible) in the second and third quarters of 2019, respectively.
(2)
The Company recorded a valuation allowance on its deferred income tax assets, which resulted in a $13.5 million increase in income taxes in the fourth quarter of 2019.
(3)
In 2018, in conjunction with a cost segregation study conducted prior to filing its 2017 federal income tax return, the Company changed the depreciation method for certain assets for federal income tax purposes to accelerate tax deductions. Changes in the Company's 2017 federal income tax return from the amounts recorded as of December 31, 2017 were primarily the result of changing the depreciable lives of assets for federal income tax purposes. These changes allowed the Company to record an incremental benefit of $3.9 million during the third quarter of 2018. See Note 9 for further information regarding income taxes. The federal corporate income tax rate changed from 35.0% to 21.0% effective January 1, 2018.
v3.19.3.a.u2
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
12 Months Ended
Dec. 29, 2019
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]  
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(In thousands of dollars)

 
 
Column B
 
Column C
 
Column D
 
Column E
Description
 
Balance at
beginning of period
 
Charged to
costs and
expenses
 
Charged to
other
accounts
 
Deduction
 
Balance
at end of
period
Year ended December 29, 2019:
 
 
 
 
 
 
 
 
 
 
Deferred income tax valuation allowance
 
$
678

 
$
13,445

 
$

 
$

 
$
14,123

Year ended December 30, 2018:
 
 
 
 
 
 
 
 
 
 
Deferred income tax valuation allowance
 
736

 
(58
)
 

 

 
678

Year ended December 31, 2017:
 
 
 
 
 
 
 
 
 
 
Deferred income tax valuation allowance
 
856

 
(120
)
 

 

 
736


v3.19.3.a.u2
Basis of Presentation (Policies)
12 Months Ended
Dec. 29, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Consolidation
Basis of Consolidation. The consolidated financial statements presented herein reflect the consolidated financial position, results of operations and cash flows of Fiesta and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation.
Fiscal Year Fiscal Year. The Company uses a 5253 week fiscal year ending on the Sunday closest to December 31. The fiscal years ended December 29, 2019; December 30, 2018; and December 31, 2017, each contained 52 weeks.
Use of Estimates
Use of Estimates. The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements. Estimates also affect the reported amounts of expenses during the reporting periods. Significant items subject to such estimates and assumptions include: insurance liabilities, evaluation for impairment of goodwill and long-lived assets, lease accounting matters, and deferred income tax assets. Actual results could differ from those estimates.
Concentrations of Risk
Concentrations of Risk. Food and supplies are ordered from approved suppliers and are shipped to the restaurants via distributors. Performance Food Group, Inc. is the primary distributor of food and beverage products and supplies for both Pollo Tropical and Taco Cabana. In the twelve months ended December 29, 2019, and December 30, 2018, Performance Food Group, Inc. accounted for approximately 85% and 74%, respectively, of the food and supplies delivered to restaurants. The Company's limited distributor relationships could have an adverse effect on the Company's operations.
Cash and Cash Equivalents
Cash and Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Inventories
Inventories. Inventories, primarily consisting of food and paper, are stated at the lower of cost (first-in, first-out) or market.
Property and Equipment
Property and Equipment. The Company capitalizes all direct costs incurred to construct and substantially improve its restaurants. These costs are depreciated and charged to expense based upon their property classification when placed in service. Property and equipment is recorded at cost. Application development stage costs for significant internally developed software projects are capitalized and amortized. Repairs and maintenance activities are expensed as incurred. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Buildings and improvements
5
to
30 years
Equipment
3
to
7 years
Computer hardware and software
3
to
7 years
Assets subject to finance lease
Shorter of useful life or lease term

Leasehold improvements, including new buildings constructed on leased land, are depreciated over the shorter of their estimated useful lives or the underlying lease term. In circumstances where an economic penalty would be presumed by the non-exercise of one or more renewal options under the lease, the Company includes those renewal option periods when determining the lease term for depreciation purposes. For significant leasehold improvements made during the latter part of the lease term, the Company amortizes those improvements over the shorter of their useful life or an extended lease term. The extended lease term would consider the exercise of renewal options if the value of the improvements would imply that an economic penalty would be incurred
without the renewal of the option. For significant leasehold improvements made during the latter part of the lease term prior to the adoption of Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), this extended term may differ from the lease term used to determine lease assets and liabilities. Building costs incurred for new restaurants on leased land are depreciated over the lease term, which is generally a 20-year period.
Cloud-Based Computing Arrangements
Cloud-Based Computing Arrangements. The Company defers and amortizes application development stage costs for cloud-based computing arrangements over the life of the related service (subscription) agreement.
Goodwill Goodwill. Goodwill represents the excess purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets acquired by Carrols Restaurant Group, Inc. ("Carrols"), Fiesta's former parent company, from the acquisition of Pollo Tropical in 1998 and Taco Cabana in 2000. Goodwill is not amortized but is assessed for impairment at least annually as of the last day of the fiscal year or more frequently if impairment indicators exist.
Long-Lived Assets Long-Lived Assets. The Company assesses the recoverability of property and equipment and definite-lived intangible assets, including right-of-use ("ROU") lease assets, by determining whether the carrying value of these assets can be recovered over their respective remaining lives through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable.
Deferred Financing Costs
Deferred Financing Costs. Financing costs incurred in obtaining revolving credit facilities are capitalized and amortized over the life of the related obligation as interest expense on a straight-line basis.
Leases
Leases. The Company assesses whether an agreement contains a lease at inception. Subsequent to the adoption of ASC 842, all leases are reviewed for finance or operating classification once control is obtained. The majority of the Company's leases are operating leases. Operating leases are included within operating lease right-of-use assets, other current liabilities, and operating lease liabilities in the consolidated balance sheets. Finance leases are included within property and equipment, net, current portion of long-term debt, and long-term debt, net of current portion in the consolidated balance sheets.
ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance and is reduced by lease incentives received. As most leases do not provide an implicit rate, the Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments. Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company assumes options are reasonably certain to be exercised when such options are required to achieve a minimum 20-year lease term for new restaurant properties, and subsequent to the adoption of ASC 842, when it incurs significant leasehold improvement costs near the end of a lease term. The Company uses judgment and available data to allocate consideration in a contract when it leases land and a building. The Company also uses judgment in determining its incremental borrowing rate, which includes selecting a yield curve based on a synthetic credit rating determined using a valuation model. Lease expense for lease payments is recognized on a straight-line basis over the lease term unless the related ROU asset has been adjusted for an impairment charge. The Company has real estate lease agreements with lease and non-lease components, which are accounted for as a single lease component.
Income Taxes
Income Taxes. Deferred income tax assets and liabilities are based on the difference between the financial statement and tax bases of assets and liabilities as measured by the tax rates that are anticipated to be in effect when those differences reverse. The deferred tax provision generally represents the net change in deferred tax assets and liabilities during the period. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts for which realization is more likely than not. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
Advertising Costs
Advertising Costs. All advertising costs are expensed as incurred.
Cost of Sales
Cost of Sales. The Company includes the cost of food, beverage and paper, net of any discounts, in cost of sales. Cost of sales excludes depreciation and amortization expense, which are presented separately on the consolidated statement of operations.
Pre-opening Costs
Pre-opening Costs. The Company's pre-opening costs are generally incurred beginning four to six months prior to a restaurant opening and generally include restaurant employee wages and related expenses, travel expenditures, recruiting, training,
promotional costs associated with the restaurant opening and rent, including any non-cash rent expense recognized during the construction period.
Insurance Insurance.  The Company is insured for workers' compensation, general liability and medical insurance claims under policies where it pays all claims, subject to stop-loss limitations both for individual claims and for general liability, medical insurance and certain workers' compensation claims in the aggregate. Losses are accrued based upon estimates of the aggregate liability for claims based on the Company's experience and certain actuarial methods used to measure such estimates. The Company does not discount any of its self-insurance obligations.
Fair Value of Financial Instruments
 Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date under current market conditions. In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value as follows: Level 1 inputs are quoted prices in active markets for identical assets or liabilities; Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities; and Level 3 inputs are unobservable and reflect management's own assumptions. The following methods were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate the fair value:
Current Assets and Liabilities. The carrying values reported on the consolidated balance sheet of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of those financial instruments.
Revolving Credit Borrowings. The fair value of outstanding revolving credit borrowings under the Company's senior credit facility, which is considered Level 2, is based on current LIBOR rates.
Revenue Recognition
Gift cards. The Company sells gift cards to its customers in its restaurants and through select third parties. The Company recognizes revenue from gift cards upon redemption by the customer. For unredeemed gift cards that the Company expects to be entitled to breakage, the Company recognizes expected breakage as revenue in proportion to the pattern of redemption by the customers. The gift cards have no stated expiration dates. Revenues from unredeemed gift cards and gift card liabilities, which are recorded in other current liabilities, are not material to the Company's financial statements. Prior to adopting Topic 606, the Company did not recognize breakage on its gift cards.
Revenue Recognition. Revenue is recognized upon transfer of promised products or services to customers in an amount that reflects the consideration the Company received in exchange for those products or services. Revenues from the Company's owned and operated restaurants are recognized when payment is tendered at the time of sale. Franchise royalty revenues are based on a percent of gross sales and are recorded as income when earned. Initial franchise fees and area development fees associated with new franchise agreements are not distinct from the continuing rights and services offered by the Company during the term of the related franchise agreements and are recognized as income over the term of the related franchise agreements. A portion of the initial franchise fee is allocated to training services and is recognized as revenue when the Company completes the training services. Prior to adopting Accounting Standards Codification Topic 606 ("Topic 606"), the Company recognized initial franchise fees as revenue in the period that a franchised location opened for business.
Guidance Adopted in 2019 and Recent Accounting Pronouncements
Guidance Adopted in 2019. In February 2016, and in subsequent updates, the Financial Accounting Standards Board ("FASB") issued ASC 842, which requires lessee recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements. The Company adopted this new accounting standard and all the related amendments as of December 31, 2018 using the modified retrospective method, with certain optional practical expedients including the transition practical expedient package, which among other things does not require reassessment of lease classification. The Company elected the transition method that allows it to initially apply the new standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The comparative period information has not been restated and continues to be reported under the accounting standard in effect for that period.
The Company has recognized lease liabilities and corresponding right-of-use ("ROU") lease assets for substantially all of the leases it previously accounted for as operating leases, including leases related to closed restaurant properties. The initial ROU assets were calculated as the present value of the remaining operating lease payments using the Company's incremental borrowing rate as of December 31, 2018, reduced by accrued occupancy costs such as certain closed-restaurant lease reserves, accrued rent (including accruals to expense operating lease payments on a straight-line basis), unamortized lease incentives and any unamortized
sale-leaseback gains that resulted from off-market terms and increased by unamortized lease acquisition costs. Upon the adoption of ASC 842, the Company no longer records closed restaurant lease reserves, and ROU lease assets are reviewed for impairment with the Company's long-lived assets.
The Company elected the practical expedient to combine lease and non-lease components of real estate contracts, which resulted in classification of certain occupancy related expenses that are included in other restaurant operating expenses for periods prior to the adoption of ASC 842 as restaurant rent expenses in the consolidated statement of operations for periods subsequent to the adoption of ASC 842. The Company separately presents rent expense related to its closed restaurant locations and any sublease income related to these closed restaurant locations within closed restaurant rent expense, net of sublease income in the consolidated statement of operations for periods subsequent to the adoption of ASC 842.
The Company recorded an initial adjustment to the opening balance of retained earnings of $14.0 million associated with previously deferred gains on sale-leaseback transactions and impairment of operating lease right-of-use assets as of the date of adoption. This adjustment consisted of $18.6 million in deferred gains on sale-leaseback transactions, net of a related deferred tax asset of $4.3 million and $0.2 million in impairment charges, net of tax. For any future sale-leaseback transactions, the gain (adjusted for any off-market terms) will be recognized immediately.
In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which eliminates the requirement to calculate the implied fair value of goodwill if the fair value of a reporting unit is less than the carrying amount of the reporting unit. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. In 2019, the Company early adopted this new accounting standard and performed its interim impairment tests in accordance with ASU 2017-04. In the second quarter of 2019, the Company recognized a $46.5 million impairment of its Taco Cabana reporting unit goodwill, which represents the excess of the reporting unit's carrying value over its fair value at June 30, 2019. In the third quarter of 2019, the Company recognized a $21.4 million impairment of its Taco Cabana reporting unit goodwill. In the third quarter of 2019, the excess of the Taco Cabana reporting unit's carrying value over its fair value was greater than the balance of the reporting unit's goodwill, resulting in a full impairment of the Taco Cabana reporting unit's goodwill.
Recent Accounting Pronouncements. In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The guidance will be effective for interim and annual periods beginning after December 15, 2019. Early adoption is permitted and may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company does not expect the standard to have a material effect on its financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), which is a part of the Simplification Initiative being undertaken by the FASB to reduce complexity of accounting standards. The amendments in this update simplify the accounting for income taxes by removing certain exceptions, the most notable for the Company being the exception to the general methodology for calculating income taxes in an interim period when the year-to-date loss exceeds the anticipated loss for the full year. The guidance will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted and any adjustments should be reflected as of the beginning of the annual period of adoption. Amendments relevant to the Company should be applied on a prospective basis. The Company is still evaluating the impact the standard will have on its financial statements.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets, principally property and equipment and lease ROU assets, for impairment at the restaurant level. The Company has elected to exclude operating lease payments and liabilities from future cash flows and carrying values, respectively, in its impairment review. In addition to considering management's plans, known regulatory or governmental actions and damage due to acts of God (hurricanes, tornadoes, etc.), the Company considers a triggering event to have occurred related to a specific restaurant if the restaurant's cash flows, exclusive of operating lease payments, for the last twelve months are less than a minimum threshold or if consistent levels of cash flows for the remaining lease period are less than the carrying value of the restaurant's assets. If an indicator of impairment exists for any of its assets, an estimate of undiscounted future cash flows, exclusive of operating lease payments, over the life of the primary asset for each restaurant is compared to that long-lived asset group's carrying value, excluding operating lease liabilities. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. There is uncertainty in the projected undiscounted future cash flows used in the Company's impairment review analysis. If actual performance does not achieve the projections, the Company may recognize impairment charges in future periods, and such charges could be material. Prior to the adoption of ASC 842 on December 31, 2018, for closed restaurant locations, the Company reviewed the future minimum lease payments and related ancillary costs from
the date of the restaurant closure to the end of the remaining lease term and recorded a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries.
Purchase of Treasury Stock
Purchase of Treasury Stock
In 2018, the Company's board of directors approved a share repurchase program for up to 1,500,000 shares of the Company's common stock. In 2019, the Company's board of directors approved increases to the share repurchase program of an additional 1,500,000 shares of the Company's common stock for an aggregate approval of 3,000,000 shares of the Company's common stock. Under the share repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The share repurchase program has no time limit and may be modified, suspended, superseded or terminated at any time by the Company's board of directors. The Company repurchased 1,381,137 shares and 112,358 shares of its common stock under the program in open market transactions during the twelve months ended December 29, 2019, and December 30, 2018, for $14.3 million and $2.8 million, respectively. The repurchased shares are held as treasury stock at cost.
Segment Reporting
Each segment's accounting policies are the same as those described in the summary of significant accounting policies in Note 1. Prior to the second quarter of 2017, the primary measures of segment profit or loss used to assess performance and allocate resources were income (loss) before taxes and an Adjusted EBITDA measure, which was defined as earnings attributable to the applicable operating segment before interest, income taxes, depreciation and amortization, impairment and other lease charges, stock-based compensation expense and other income and expense.
In 2017, the Company's board of directors appointed a new Chief Executive Officer who initiated the Plan and uses an Adjusted EBITDA measure for the purpose of assessing performance and allocating resources to segments. The new Adjusted EBITDA measure used by the chief operating decision maker includes adjustments for significant items that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants. Beginning in the second quarter of 2017, the primary measure of segment profit or loss used by the chief operating decision maker to assess performance and allocate resources is Adjusted EBITDA, which is now defined as earnings attributable to the applicable operating segments before interest expense, income taxes, depreciation and amortization, impairment and other lease charges, goodwill impairment, closed restaurant rent expense, net of sublease income, stock-based compensation expense, other expense (income), net, and certain significant items for each segment that management believes are related to strategic changes and/or are not related to the ongoing operation of the Company's restaurants
Earnings per Share
Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) applicable to common shares by the weighted average number of common shares outstanding during each period. Non-vested restricted shares contain a non-forfeitable right to receive dividends on a one-to-one per share ratio to common shares and are thus considered participating securities. The impact of the participating securities is included in the computation of basic EPS pursuant to the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines earnings attributable to common shares and participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. EPS is computed by dividing undistributed earnings allocated to common stockholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and non-vested restricted shares based on the weighted average shares outstanding during the period.
Diluted EPS reflects the potential dilution that could occur if the restricted stock units were to be converted into common shares. Restricted stock units with performance conditions are only included in the diluted EPS calculation to the extent that performance conditions have been met at the measurement date. Diluted EPS is computed by adjusting the basic weighted average number of common shares by the dilutive effect of the restricted stock units, determined using the treasury stock method.
v3.19.3.a.u2
Basis of Presentation (Tables)
12 Months Ended
Dec. 29, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Property and Equipment Useful Lives Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Buildings and improvements
5
to
30 years
Equipment
3
to
7 years
Computer hardware and software
3
to
7 years
Assets subject to finance lease
Shorter of useful life or lease term

Property and equipment consisted of the following:
 
December 29, 2019
 
December 30, 2018
Land and land improvements
$
21,051

 
$
20,428

Owned buildings
13,978

 
15,205

Leasehold improvements (1)
212,413

 
207,206

Equipment
219,610

 
214,674

Assets subject to capital/finance leases
2,713

 
1,905

 
469,765

 
459,418

Less accumulated depreciation and amortization
(257,821
)
 
(228,090
)
 
$
211,944

 
$
231,328


(1)
Leasehold improvements include the cost of new buildings constructed on leased land.
v3.19.3.a.u2
Prepaid Expenses and Other Current Assets (Tables)
12 Months Ended
Dec. 29, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets, consist of the following:
 
December 29, 2019
 
December 30, 2018
Prepaid contract expenses
$
4,410

 
$
4,232

Assets held for sale(1)
4,110

 

Other
2,085

 
2,330

 
$
10,605

 
$
6,562

(1)
One closed Pollo Tropical restaurant and two closed Taco Cabana restaurant properties owned by the Company were classified as held for sale as of December 29, 2019.
v3.19.3.a.u2
Property and Equipment (Tables)
12 Months Ended
Dec. 29, 2019
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment Depreciation and amortization is provided using the straight-line method over the following estimated useful lives:
Buildings and improvements
5
to
30 years
Equipment
3
to
7 years
Computer hardware and software
3
to
7 years
Assets subject to finance lease
Shorter of useful life or lease term

Property and equipment consisted of the following:
 
December 29, 2019
 
December 30, 2018
Land and land improvements
$
21,051

 
$
20,428

Owned buildings
13,978

 
15,205

Leasehold improvements (1)
212,413

 
207,206

Equipment
219,610

 
214,674

Assets subject to capital/finance leases
2,713

 
1,905

 
469,765

 
459,418

Less accumulated depreciation and amortization
(257,821
)
 
(228,090
)
 
$
211,944

 
$
231,328


(1)
Leasehold improvements include the cost of new buildings constructed on leased land.
v3.19.3.a.u2
Goodwill (Tables)
12 Months Ended
Dec. 29, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
A summary of changes in goodwill during the twelve months ended December 29, 2019, is as follows:
 
Pollo
Tropical
 
Taco
Cabana
 
Total
Balance, December 30, 2018
$
56,307

 
$
67,177

 
$
123,484

Impairment charges(1)(2)

 
(67,177
)
 
(67,177
)
Balance, December 29, 2019
$
56,307

 
$

 
$
56,307

(1)  
Accumulated impairment losses at December 29, 2019, were $67.2 million. There were no accumulated impairment losses at December 30, 2018.
(2)
Impairment charges during the twelve months ended December 29, 2019, include $0.7 million previously classified as an intangible asset and included in other assets.
v3.19.3.a.u2
Impairment of Long-Lived Assets and Other Lease Charges (Tables)
12 Months Ended
Dec. 29, 2019
Restructuring and Related Activities [Abstract]  
Impairment of Long-Lived Assets by Segment
A summary of impairment on long-lived assets and other lease charges recorded by segment is as follows:
 
Year Ended
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Pollo Tropical
$
15

 
$
13,587

 
$
57,947

Taco Cabana
13,086

 
7,557

 
3,813

 
$
13,101

 
$
21,144

 
$
61,760


Other Lease Charges (Recoveries) by Segment
A summary of impairment on long-lived assets and other lease charges recorded by segment is as follows:
 
Year Ended
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Pollo Tropical
$
15

 
$
13,587

 
$
57,947

Taco Cabana
13,086

 
7,557

 
3,813

 
$
13,101

 
$
21,144

 
$
61,760


v3.19.3.a.u2
Other Liabilities (Tables)
12 Months Ended
Dec. 29, 2019
Other Liabilities Disclosure [Abstract]  
Other Current Liabilities
Other current liabilities consist of the following:
 
December 29, 2019
 
December 30, 2018
Operating lease liabilities
$
22,338

 
$

Accrued workers' compensation and general liability claims
4,354

 
4,886

Sales and property taxes
1,889

 
1,958

Accrued occupancy costs
891

 
4,554

Other
2,797

 
2,688

 
$
32,269

 
$
14,086


Other Non-current Liabilities
Other non-current liabilities consist of the following:
 
December 29, 2019
 
December 30, 2018
Accrued occupancy costs
$
78

 
$
21,534

Accrued workers' compensation and general liability claims
7,348

 
6,808

Deferred compensation
424

 
867

Other
555

 
3,295

 
$
8,405

 
$
32,504


Activity in the Closed-Store Reserve
The following table presents the activity in the closed restaurant reserve, of which $0.1 million and $4.4 million are included in non-current liabilities at December 29, 2019 and December 30, 2018, respectively, with the remainder in other current liabilities.
 
Year Ended
 
December 29, 2019
 
December 30, 2018
Balance, beginning of period
$
8,819

 
$
12,994

Provisions for restaurant closures

 
2,228

Additional lease charges (recoveries), net

 
(152
)
Payments, net
(1,405
)
 
(6,778
)
Other adjustments(1)
(6,662
)
 
527

Balance, end of period
$
752

 
$
8,819


(1)
As a result of adopting ASC 842 on December 31, 2018, the portion of the closed restaurant reserve related to operating lease rental payments totaling $6.0 million was reclassified and included as a component of the related ROU assets during the twelve months ended December 29, 2019. The portion of the closed restaurant reserve related to variable ancillary lease costs was not reclassified and was not included as a reduction to ROU assets.
v3.19.3.a.u2
Leases (Tables)
12 Months Ended
Dec. 29, 2019
Leases [Abstract]  
Lease Expense
Lease expense consisted of the following:
 
 
Twelve Months Ended
 
 
December 29, 2019
Operating lease cost
 
$
45,414

 
 
 
Finance lease costs:
 
 
Amortization of right-of-use assets
 
$
202

Interest on lease liabilities
 
226

Total finance lease costs
 
$
428

 
 
 
Variable lease costs
 
12,050

Sublease income
 
(4,037
)
Total lease costs
 
$
53,855


Supplemental Balance Sheet Information
Supplemental balance sheet information related to leases is as follows:
 
December 29, 2019
Operating Leases
 
Operating lease right-of-use assets
$
251,272

 
 
Other current liabilities
$
22,338

Operating lease liabilities
256,798

Total operating lease liabilities
$
279,136

 
 
Finance Leases
 
Property and equipment, gross
$
2,713

Accumulated amortization
(1,323
)
Property and equipment, net
$
1,390

 
 
Current portion of long-term debt
$
212

Long-term debt, net of current portion
1,823

Total finance lease liabilities
$
2,035

Weighted Average Remaining Lease Term (in Years)
 
Operating leases
12.1

Finance leases
7.9

 
 
Weighted Average Discount Rate
 
Operating leases
7.67
%
Finance leases
12.67
%

Supplemental Cash Flow Information
Supplemental cash flow information related to leases is as follows:
 
Twelve Months Ended
 
December 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
 
Operating cash flows for operating leases
$
41,216

Operating cash flows for finance leases
226

Financing cash flows for finance leases
164

 
 
Right-of-use assets obtained in exchange for lease liabilities:
 
Operating lease ROU assets
12,654

Finance lease ROU assets
495

 
 
Right-of-use assets and lease liabilities reduced for terminated leases:
 
Operating lease ROU assets
4,372

Operating lease liabilities
5,126

 
 
Operating lease right-of-use assets obtained and liabilities incurred as a result of adoption of ASC 842:
 
Operating lease ROU assets
267,743

Operating lease liabilities
291,373


Maturities of Operating Lease Liabilities
Maturities of lease liabilities were as follows:
 
Operating Leases
 
Finance Leases
2020
$
42,479

 
$
434

2021
40,189

 
475

2022
38,917

 
475

2023
35,742

 
428

2024
32,481

 
350

Thereafter
251,977

 
1,278

Total lease payments
441,785

 
3,440

Less amount representing interest
(162,649
)
 
(1,405
)
Total discounted lease liabilities
279,136

 
2,035

Less current portion
(22,338
)
 
(212
)
Long-term portion of lease liabilities
$
256,798

 
$
1,823


Maturities of Finance Lease Liabilities
Maturities of lease liabilities were as follows:
 
Operating Leases
 
Finance Leases
2020
$
42,479

 
$
434

2021
40,189

 
475

2022
38,917

 
475

2023
35,742

 
428

2024
32,481

 
350

Thereafter
251,977

 
1,278

Total lease payments
441,785

 
3,440

Less amount representing interest
(162,649
)
 
(1,405
)
Total discounted lease liabilities
279,136

 
2,035

Less current portion
(22,338
)
 
(212
)
Long-term portion of lease liabilities
$
256,798

 
$
1,823


Minimum Rent Commitments Due Under Non-Cancelable Operating Leases
Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
 
Operating
 
Capital
2019
$
44,427

 
$
323

2020
44,144

 
327

2021
41,396

 
342

2022
40,215

 
342

2023
36,587

 
349

Thereafter
264,704

 
1,646

Total minimum lease payments(1)
$
471,473

 
3,329

Less amount representing interest
 
 
(1,585
)
Total obligations under capital leases
 
 
1,744

Less current portion
 
 
(108
)
Long-term debt under capital leases
 
 
$
1,636

(1)
Minimum operating lease payments include contractual rent payments for closed restaurants for which the Company is still obligated under the lease agreements and have not been reduced by minimum sublease rent of $41.4 million due in the future under non-cancelable subleases. See Note 6—Other Liabilities.
Minimum Rent Commitments Due Under Capital Leases
Minimum rent commitments due under capital and non-cancelable operating leases at December 30, 2018, were as follows:
 
Operating
 
Capital
2019
$
44,427

 
$
323

2020
44,144

 
327

2021
41,396

 
342

2022
40,215

 
342

2023
36,587

 
349

Thereafter
264,704

 
1,646

Total minimum lease payments(1)
$
471,473

 
3,329

Less amount representing interest
 
 
(1,585
)
Total obligations under capital leases
 
 
1,744

Less current portion
 
 
(108
)
Long-term debt under capital leases
 
 
$
1,636

(1)
Minimum operating lease payments include contractual rent payments for closed restaurants for which the Company is still obligated under the lease agreements and have not been reduced by minimum sublease rent of $41.4 million due in the future under non-cancelable subleases. See Note 6—Other Liabilities.
Undiscounted Cash Flows to be Received Under Operating Subleases
The undiscounted cash flows to be received under operating subleases were as follows:
 
Operating Leases
2020
$
4,651

2021
4,878

2022
4,833

2023
4,828

2024
4,884

Thereafter
45,031

Total
$
69,105


Total Rent Expense on Operating Leases, Including Contingent Rentals
Total rent expense on operating leases, including contingent rentals, prior to the adoption of ASC 842 was as follows:
 
Year Ended
 
December 30, 2018
 
December 31, 2017
Minimum rent on real property, excluding rent included in pre-opening costs
$
35,881

 
$
36,760

Additional rent based on percentage of sales
153

 
176

Restaurant rent expense
36,034

 
36,936

Rent included in pre-opening costs
861

 
856

Administrative and equipment rent
850

 
988

 
$
37,745

 
$
38,780


v3.19.3.a.u2
Long-term Debt (Tables)
12 Months Ended
Dec. 29, 2019
Debt Disclosure [Abstract]  
Schedule of Long-term Debt
Long term debt at December 29, 2019, and December 30, 2018, consisted of the following:
 
December 29, 2019
 
December 30, 2018
Revolving credit facility
$
75,000

 
$
78,000

Finance/capital leases
2,035

 
1,744

 
77,035

 
79,744

Less: current portion of long-term debt
(212
)
 
(108
)
 
$
76,823

 
$
79,636


v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 29, 2019
Income Tax Disclosure [Abstract]  
Schedule of the Company’s Income Tax Provision (Benefit)
The Company's income tax provision (benefit) was comprised of the following:    
 
Year Ended
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Current:
 
 
 
 
 
Federal
$
(2,347
)
 
$
(10,378
)
 
$
(5,718
)
Foreign
336

 
355

 
346

State
492

 
421

 
445

 
(1,519
)
 
(9,602
)
 
(4,927
)
Deferred:
 
 
 
 
 
Federal
(2,132
)
 
6,591

 
(1,059
)
State
(425
)
 
297

 
(1,649
)

(2,557
)
 
6,888

 
(2,708
)
Valuation allowance
13,445

 
(58
)
 
(120
)
 
$
9,369

 
$
(2,772
)
 
$
(7,755
)

Components of Deferred Income Tax Assets and Liabilities The components of deferred income tax assets and liabilities at December 29, 2019, and December 30, 2018, were as follows:
 
 
December 29, 2019
 
December 30, 2018
Deferred income tax assets:
 
 
 
 
  Accrued vacation benefits
 
$
875

 
$
1,017

  Incentive compensation
 
1,024

 
959

  Other accruals
 
2,804

 
2,976

  Deferred income on sale-leaseback of real estate
 

 
4,591

  Operating lease liabilities
 
65,251

 

  Occupancy costs
 
175

 
6,038

  Tax credit carryforwards
 
1,949

 
1,534

  Federal net operating loss
 
2,770

 
1,040

  Other
 
973

 
839

        Gross deferred income tax assets
 
75,821

 
18,994

Deferred income tax liabilities:
 
 
 
 
  Right-of-use operating lease assets
 
(58,524
)
 

  Property and equipment depreciation
 
(6,509
)
 
(5,438
)
  Amortization of other intangibles, net
 
(34
)
 
(2,121
)
  Cloud-based software deferred costs
 
(990
)
 

  Other
 
(400
)
 
(374
)
        Gross deferred income tax liabilities
 
(66,457
)
 
(7,933
)
  Less: Valuation allowance
 
(14,123
)
 
(678
)
Net deferred income tax assets
 
$
(4,759
)
 
$
10,383


Reconciliation of the Statutory Federal Income Tax Provision (Benefit) to the Effective Tax Provision (Benefit) A reconciliation of the statutory federal income tax provision (benefit) to the effective tax provision (benefit) was as follows:
 
Year Ended
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Statutory federal income tax provision (benefit)
$
(15,753
)
 
$
1,053

 
$
(15,394
)
State income taxes, net of federal benefit
49

 
552

 
(734
)
Change in valuation allowance
13,445

 
(58
)
 
(120
)
Change in federal income tax rate and tax methods
(716
)
 
(3,977
)
 
8,952

Net share-based compensation-tax benefit deficiencies
235

 
178

 
228

Non-deductible goodwill
12,357

 

 

Non-deductible expenses
214

 
53

 
84

Foreign taxes
336

 
355

 
346

Employment tax credits
(381
)
 
(897
)
 
(914
)
Foreign tax credits/deductions
(71
)
 
(75
)
 
(121
)
Other
(346
)
 
44

 
(82
)
 
$
9,369

 
$
(2,772
)
 
$
(7,755
)

v3.19.3.a.u2
Stockholders' Equity (Tables)
12 Months Ended
Dec. 29, 2019
Share-based Payment Arrangement [Abstract]  
Schedule of Non-Vested Restricted Shares and Restricted Stock Units Activity
A summary of all non-vested restricted shares and restricted stock units activity for the year ended December 29, 2019, is as follows:
 
Non-Vested Shares
 
Restricted Stock Units
 
Shares
 
Weighted Average Grant Date
Fair Value
 
Units
 
Weighted Average Grant Date
Fair Value
Outstanding at December 30, 2018
287,866

 
$
20.70

 
231,112

 
$
12.44

Granted
287,002

 
13.00

 
15,348

 
1.76

Vested/Released
(131,185
)
 
20.30

 
(3,516
)
 
62.05

Forfeited
(88,078
)
 
17.02

 
(66,582
)
 
15.34

Outstanding at December 29, 2019
355,605

 
$
15.47

 
176,362

 
$
9.42


Restricted Stock Units Subject to Market Conditions Assumptions The assumptions used to value grant restricted stock units subject to market conditions are detailed below:
 
 
2019
 
2018
 
2017
 
 
Non-CEO Grant
 
Non-CEO Grant
 
Non-CEO Grant
 
CEO Grant
Grant date stock price
 
$
14.66

 
$
18.70

 
$
17.60

 
$
22.55

Fair value at grant date
 
$
1.76

 
$
6.96

 
$
9.31

 
$
12.90

Risk free interest rate
 
2.53
%
 
2.40
%
 
1.51
%
 
1.52
%
Expected term (in years)
 
2

 
3

 
2.5

 
3.8

Dividend yield
 
%
 
%
 
%
 
%
Expected volatility
 
43.18
%
 
41.49
%
 
41.72
%
 
39.06
%

v3.19.3.a.u2
Business Segment Information (Tables)
12 Months Ended
Dec. 29, 2019
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment
Year Ended
 
Pollo Tropical
 
Taco Cabana
 
Other
 
Consolidated
December 29, 2019:
 
 
 
 
 
 
 
 
Restaurant sales
 
$
361,693

 
$
296,570

 
$

 
$
658,263

Franchise revenue
 
1,780

 
900

 

 
2,680

Cost of sales
 
115,119

 
92,334

 

 
207,453

Restaurant wages and related expenses(1)
 
84,909

 
94,269

 

 
179,178

Restaurant rent expense
 
22,050

 
25,755

 

 
47,805

Other restaurant operating expenses
 
49,768

 
42,129

 

 
91,897

Advertising expense
 
12,358

 
10,821

 

 
23,179

General and administrative expense(2)
 
31,023

 
25,172

 

 
56,195

Adjusted EBITDA
 
50,560

 
7,889

 

 
58,449

Depreciation and amortization
 
21,476

 
17,719

 

 
39,195

Capital expenditures
 
21,921

 
18,023

 
1,303

 
41,247

December 30, 2018:
 
 
 
 
 
 
 
 
Restaurant sales
 
$
374,381

 
$
311,544

 
$

 
$
685,925

Franchise revenue
 
1,815

 
857

 

 
2,672

Cost of sales
 
123,042

 
95,904

 

 
218,946

Restaurant wages and related expenses(1)
 
87,025

 
101,106

 

 
188,131

Restaurant rent expense
 
17,457

 
18,577

 

 
36,034

Other restaurant operating expenses
 
51,757

 
49,071

 

 
100,828

Advertising expense
 
13,068

 
10,627

 

 
23,695

General and administrative expense(2)
 
29,621

 
24,904

 

 
54,525

Adjusted EBITDA
 
54,903

 
13,059

 

 
67,962

Depreciation and amortization
 
21,372

 
16,232

 

 
37,604

Capital expenditures
 
27,667

 
28,886

 
1,297

 
57,850

December 31, 2017:
 
 
 
 
 
 
 
 
Restaurant sales
 
$
372,328

 
$
294,256

 
$

 
$
666,584

Franchise revenue
 
1,787

 
761

 

 
2,548

Cost of sales
 
117,493

 
85,395

 

 
202,888

Restaurant wages and related expenses(1)
 
88,587

 
96,155

 

 
184,742

Restaurant rent expense
 
18,949

 
17,987

 

 
36,936

Other restaurant operating expenses
 
52,848

 
46,079

 

 
98,927

Advertising expense
 
16,397

 
9,694

 

 
26,091

General and administrative expense(2)
 
33,025

 
26,608

 

 
59,633

Adjusted EBITDA
 
50,937

 
16,508

 

 
67,445

Depreciation and amortization
 
21,758

 
13,199

 

 
34,957

Capital expenditures
 
31,786

 
20,781

 
3,299

 
55,866

Identifiable Assets:
 
 
 
 
 
 
 
 
December 29, 2019
 
$
340,012

 
$
195,883

 
$
32,746

 
$
568,641

December 30, 2018
 
207,435

 
174,681

 
36,543

 
418,659

December 31, 2017
 
227,194

 
167,237

 
28,882

 
423,313


(1)
Includes stock-based compensation expense of $195, $90 and $52 for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively.
(2)
Includes stock-based compensation expense of $2,649, $3,379 and $3,493 for the years ended December 29, 2019; December 30, 2018; and December 31, 2017, respectively.
Reconciliation Of Consolidated Net Income (Loss) to Adjusted EBITDA
A reconciliation of consolidated net income (loss) to Adjusted EBITDA follows:
Year Ended
 
Pollo Tropical
 
Taco Cabana
 
Consolidated
December 29, 2019:
 
 
 
 
 
 
Net loss
 
 
 
 
 
$
(84,386
)
Provision for income taxes
 
 
 
 
 
9,369

Income (loss) before taxes
 
$
20,300

 
$
(95,317
)
 
$
(75,017
)
Add:
 
 
 
 
 
 
     Non-general and administrative expense adjustments:
 
 
 
 
 
 
          Depreciation and amortization
 
21,476

 
17,719

 
39,195

          Impairment and other lease charges
 
15

 
13,086

 
13,101

          Goodwill impairment
 

 
67,909

 
67,909

          Interest expense
 
1,953

 
1,919

 
3,872

          Closed restaurant rent expense, net of sublease income
 
3,260

 
903

 
4,163

          Other expense (income), net
 
862

 
179

 
1,041

          Stock-based compensation expense in restaurant wages
 
70

 
125

 
195

                Total non-general and administrative expense adjustments
 
27,636

 
101,840

 
129,476

     General and administrative expense adjustments:
 
 
 
 
 
 
          Stock-based compensation expense
 
1,590

 
1,059

 
2,649

          Restructuring costs and retention bonuses
 
827

 
137

 
964

          Digital and brand repositioning costs
 
207

 
170

 
377

               Total general and administrative expense adjustments
 
2,624

 
1,366

 
3,990

Adjusted EBITDA
 
$
50,560

 
$
7,889

 
$
58,449

 
 
 
 
 
 
 
December 30, 2018:
 
 
 
 
 
 
Net income
 
 
 
 
 
$
7,787

Benefit from income taxes
 
 
 
 
 
(2,772
)
Income (loss) before taxes
 
$
17,639

 
$
(12,624
)
 
$
5,015

Add:
 
 
 
 
 
 
     Non-general and administrative expense adjustments:
 
 
 
 
 
 
          Depreciation and amortization
 
21,372

 
16,232

 
37,604

          Impairment and other lease charges
 
13,587

 
7,557

 
21,144

          Interest expense
 
1,920

 
2,046

 
3,966

          Other expense (income), net
 
(1,225
)
 
(1,782
)
 
(3,007
)
          Stock-based compensation expense in restaurant wages
 
34

 
56

 
90

                Total non-general and administrative expense adjustments
 
35,688

 
24,109

 
59,797

     General and administrative expense adjustments:
 
 
 
 
 
 
          Stock-based compensation expense
 
1,885

 
1,494

 
3,379

          Board and shareholder matter costs
 
(328
)
 
(269
)
 
(597
)
          Restructuring costs and retention bonuses
 
196

 
349

 
545

          Legal settlements and related costs
 
(177
)
 

 
(177
)
               Total general and administrative expense adjustments
 
1,576

 
1,574

 
3,150

Adjusted EBITDA
 
$
54,903

 
$
13,059

 
$
67,962

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Year Ended:
 
Pollo Tropical
 
Taco Cabana
 
Consolidated
December 31, 2017:
 
 
 
 
 
 
Net loss
 
 
 
 
 
$
(36,232
)
Benefit from income taxes
 
 
 
 
 
(7,755
)
Loss before taxes
 
$
(37,831
)
 
$
(6,156
)
 
$
(43,987
)
Add:
 
 
 
 
 
 
     Non-general and administrative expense adjustments:
 
 
 
 
 
 
          Depreciation and amortization
 
21,758

 
13,199

 
34,957

          Impairment and other lease charges
 
57,947

 
3,813

 
61,760

          Interest expense
 
1,348

 
1,529

 
2,877

          Other expense (income), net
 
2,427

 
(237
)
 
2,190

          Stock-based compensation expense in restaurant wages
 
(4
)
 
56

 
52

          Unused pre-production costs in advertising expense
 
322

 
88

 
410

                Total non-general and administrative expense adjustments
 
83,798

 
18,448

 
102,246

     General and administrative expense adjustments:
 
 
 
 
 
 
          Stock-based compensation expense
 
1,983

 
1,510

 
3,493

          Terminated capital project
 
484

 
365

 
849

          Board and shareholder matter costs
 
1,738

 
1,311

 
3,049

          Restructuring costs and retention bonuses
 
1,390

 
1,030

 
2,420

          Office restructuring and relocation costs
 
(152
)
 

 
(152
)
          Legal settlements and related costs
 
(473
)
 

 
(473
)
               Total general and administrative expense adjustments
 
4,970

 
4,216

 
9,186

Adjusted EBITDA
 
$
50,937

 
$
16,508

 
$
67,445


v3.19.3.a.u2
Earnings (Loss) Per Share (Tables)
12 Months Ended
Dec. 29, 2019
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Net Income per Share
The computation of basic and diluted EPS is as follows:
 
 
Year Ended
 
 
December 29, 2019
 
December 30, 2018
 
December 31, 2017
Basic and diluted EPS:
 
 
 
 
 
 
Net income (loss)
 
$
(84,386
)
 
$
7,787

 
$
(36,232
)
Less: income allocated to participating securities
 

 
85

 

Net income (loss) available to common stockholders
 
$
(84,386
)
 
$
7,702

 
$
(36,232
)
Weighted average common shares—basic
 
26,500,356

 
26,890,577

 
26,821,471

Restricted stock units
 

 
3,506

 

Weighted average common shares—diluted
 
26,500,356

 
26,894,083

 
26,821,471

 
 
 
 
 
 
 
Earnings (loss) per common share—basic
 
$
(3.18
)
 
$
0.29

 
$
(1.35
)
Earnings (loss) per common share—diluted
 
$
(3.18
)
 
$
0.29

 
$
(1.35
)

v3.19.3.a.u2
Selected Quarterly Financial and Earnings Data (Unaudited) (Tables)
12 Months Ended
Dec. 29, 2019
Quarterly Financial Information Disclosure [Abstract]  
Schedule of Quarterly Financial Information
 
Year Ended December 29, 2019
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
Revenue
$
165,852

 
$
171,381

 
$
164,248

 
$
159,462

Income (loss) from operations(1)
4,469

 
(41,850
)
 
(24,305
)
 
(9,459
)
Net income (loss)(2)
2,289

 
(43,440
)
 
(22,182
)
 
(21,053
)
Earnings (loss) per common share—basic
$
0.08

 
$
(1.62
)
 
$
(0.84
)
 
$
(0.82
)
Earnings (loss) per common share—diluted
0.08

 
(1.62
)
 
(0.84
)
 
(0.82
)
 
 
 
 
 
 
 
 
 
Year Ended December 30, 2018
 
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
Revenue
$
169,484

 
$
176,827

 
$
174,648

 
$
167,638

Income (loss) from operations(1)
6,878

 
13,500

 
(1,921
)
 
(9,476
)
Net income (loss)(3)
4,184

 
9,493

 
2,047

 
(7,937
)
Earnings (loss) per common share—basic
$
0.15

 
$
0.35

 
$
0.08

 
$
(0.30
)
Earnings (loss) per common share—diluted
0.15

 
0.35

 
0.08

 
(0.30
)
(1)
The Company recognized impairment and other lease charges of $(0.3) million, $1.8 million, $3.3 million and $8.4 million in the first, second, third and fourth quarters of 2019, respectively, and $(0.7) million, $0.8 million, $6.4 million and $14.6 million in the first, second, third and fourth quarters of 2018, respectively. See Note 5—Impairment of Long-lived Assets and Other Lease Charges. The Company recognized goodwill impairment charges of $46.5 million (which was not tax deductible) and $21.4 million (of which $9.1 million was tax deductible) in the second and third quarters of 2019, respectively.
(2)
The Company recorded a valuation allowance on its deferred income tax assets, which resulted in a $13.5 million increase in income taxes in the fourth quarter of 2019.
(3)
In 2018, in conjunction with a cost segregation study conducted prior to filing its 2017 federal income tax return, the Company changed the depreciation method for certain assets for federal income tax purposes to accelerate tax deductions. Changes in the Company's 2017 federal income tax return from the amounts recorded as of December 31, 2017 were primarily the result of changing the depreciable lives of assets for federal income tax purposes. These changes allowed the Company to record an incremental benefit of $3.9 million during the third quarter of 2018. See Note 9 for further information regarding income taxes. The federal corporate income tax rate changed from 35.0% to 21.0% effective January 1, 2018.
v3.19.3.a.u2
Basis of Presentation - Narrative (Details)
12 Months Ended
Dec. 29, 2019
segment
restaurant
Dec. 30, 2018
Entity Information [Line Items]    
Number of fast-casual restaurant brands | segment 2  
Minimum    
Entity Information [Line Items]    
Period prior to restaurant opening when pre-opening costs are incurred 4 months  
Maximum    
Entity Information [Line Items]    
Period prior to restaurant opening when pre-opening costs are incurred 6 months  
Supplier Concentration Risk    
Entity Information [Line Items]    
Percentage of supplies delivered to restaurants provided by one vendor 85.00% 74.00%
Entity Operated Units | Pollo Tropical    
Entity Information [Line Items]    
Number of restaurants 142  
Entity Operated Units | Taco Cabana    
Entity Information [Line Items]    
Number of restaurants 164  
Franchised Units | Pollo Tropical    
Entity Information [Line Items]    
Number of restaurants 32  
Franchised Units | Pollo Tropical | Puerto Rico    
Entity Information [Line Items]    
Number of restaurants 17  
Franchised Units | Pollo Tropical | Panama    
Entity Information [Line Items]    
Number of restaurants 4  
Franchised Units | Pollo Tropical | Guyana    
Entity Information [Line Items]    
Number of restaurants 2  
Franchised Units | Pollo Tropical | Ecuador    
Entity Information [Line Items]    
Number of restaurants 1  
Franchised Units | Pollo Tropical | Bahamas    
Entity Information [Line Items]    
Number of restaurants 1  
Franchised Units | Pollo Tropical | Florida | College Campus    
Entity Information [Line Items]    
Number of restaurants 6  
Franchised Units | Pollo Tropical | Florida | Hospital    
Entity Information [Line Items]    
Number of restaurants 1  
Franchised Units | Taco Cabana    
Entity Information [Line Items]    
Number of restaurants 8  
Franchised Units | Taco Cabana | New Mexico    
Entity Information [Line Items]    
Number of restaurants 6  
Franchised Units | Taco Cabana | Texas    
Entity Information [Line Items]    
Number of restaurants 2  
v3.19.3.a.u2
Basis of Presentation - Property Disclosures (Details)
12 Months Ended
Dec. 29, 2019
Property, Plant and Equipment [Line Items]  
Lease term, new restaurants 20 years
Minimum  
Property, Plant and Equipment [Line Items]  
Lease term, new restaurants 20 years
Maximum  
Property, Plant and Equipment [Line Items]  
Lease term, new restaurants 40 years
Buildings and improvements | Minimum  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, useful life 5 years
Buildings and improvements | Maximum  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, useful life 30 years
Equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, useful life 3 years
Equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, useful life 7 years
Computer hardware and software | Minimum  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, useful life 3 years
Computer hardware and software | Maximum  
Property, Plant and Equipment [Line Items]  
Property, plant and equipment, useful life 7 years
v3.19.3.a.u2
Basis of Presentation - Fair Value Disclosures (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Carrying value of senior credit facility $ 75,000 $ 78,000
Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value of senior credit facility $ 75,000 $ 78,000
v3.19.3.a.u2
Basis of Presentation - Guidance Adopted in 2019 (Details) - USD ($)
3 Months Ended 12 Months Ended
Sep. 29, 2019
Jun. 30, 2019
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Cumulative effect adjustment to retained earnings     $ 1,884,000 $ 72,268,000    
Deferred gains on sale-leaseback transactions     0 19,899,000    
Deferred tax asset related to sale-leaseback transactions     0 4,591,000    
Goodwill impairment     $ 67,909,000 $ 0 $ 0  
ASU 2016-02            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Cumulative effect adjustment to retained earnings           $ 14,000,000.0
Deferred gains on sale-leaseback transactions           18,600,000
Deferred tax asset related to sale-leaseback transactions           4,300,000
Impairment charges related to sale-leaseback transactions           $ 200,000
New Accounting Pronouncement, Early Adoption, Effect | ASU 2017-04            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Goodwill impairment $ 21,400,000 $ 46,500,000        
v3.19.3.a.u2
Prepaid Expenses and Other Current Assets (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
restaurant
Dec. 30, 2018
USD ($)
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Prepaid contract expenses $ 4,410 $ 4,232
Assets held for sale 4,110 0
Other 2,085 2,330
Prepaid expenses and other current assets $ 10,605 $ 6,562
Pollo Tropical    
Property, Plant and Equipment [Line Items]    
Restaurant properties classified as held for sale | restaurant 1  
Taco Cabana    
Property, Plant and Equipment [Line Items]    
Restaurant properties classified as held for sale | restaurant 2  
v3.19.3.a.u2
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 469,765 $ 459,418
Less accumulated depreciation and amortization (257,821) (228,090)
Property and equipment, net 211,944 231,328
Land and land improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 21,051 20,428
Owned buildings    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 13,978 15,205
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 212,413 207,206
Equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 219,610 214,674
Assets subject to capital/finance leases    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 2,713 $ 1,905
v3.19.3.a.u2
Property and Equipment - Narrative (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Property, Plant and Equipment [Abstract]      
Assets subject to capital/finance leases, accumulated amortization $ 1,300 $ 1,100  
Depreciation and amortization $ 39,195 $ 37,604 $ 34,957
v3.19.3.a.u2
Goodwill - Narrative (Details) - USD ($)
3 Months Ended 12 Months Ended
Sep. 29, 2019
Jun. 30, 2019
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Goodwill [Line Items]          
Changes in goodwill       $ 0 $ 0
Changes in goodwill, impairment loss     $ 67,909,000 $ 0 $ 0
New Accounting Pronouncement, Early Adoption, Effect | ASU 2017-04          
Goodwill [Line Items]          
Changes in goodwill, impairment loss $ 21,400,000 $ 46,500,000      
Goodwill impairment loss deductible for tax purposes 9,100,000        
Goodwill impairment loss, income tax benefit $ 2,100,000        
v3.19.3.a.u2
Goodwill - Summary of Changes in Goodwill (Details) - USD ($)
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Goodwill      
Balance, December 30, 2018 $ 123,484,000    
Impairment charges (67,909,000) $ 0 $ 0
Balance, December 29, 2019 56,307,000 123,484,000  
Accumulated impairment loss 67,200,000 0  
Impairment loss for asset previously classified as intangible asset and included in other assets 700,000    
Pollo Tropical      
Goodwill      
Balance, December 30, 2018 56,307,000    
Impairment charges 0    
Balance, December 29, 2019 56,307,000 56,307,000  
Taco Cabana      
Goodwill      
Balance, December 30, 2018 67,177,000    
Impairment charges (67,177,000)    
Balance, December 29, 2019 $ 0 $ 67,177,000  
v3.19.3.a.u2
Impairment of Long-Lived Assets and Other Lease Charges - Schedule of Impairment and Other Lease Charges (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Restructuring Cost and Reserve [Line Items]                      
Impairment and other lease charges $ 8,400 $ 3,300 $ 1,800 $ (300) $ 14,600 $ 6,400 $ 800 $ (700) $ 13,101 $ 21,144 $ 61,760
Pollo Tropical                      
Restructuring Cost and Reserve [Line Items]                      
Impairment and other lease charges                 15 13,587 57,947
Taco Cabana                      
Restructuring Cost and Reserve [Line Items]                      
Impairment and other lease charges                 $ 13,086 $ 7,557 $ 3,813
v3.19.3.a.u2
Impairment of Long-Lived Assets and Other Lease Charges - Narrative (Details)
$ in Millions
12 Months Ended
Jan. 13, 2020
restaurant
Dec. 29, 2019
USD ($)
restaurant
Dec. 30, 2018
USD ($)
restaurant
Dec. 31, 2017
USD ($)
restaurant
Jan. 01, 2017
restaurant
Jul. 01, 2018
restaurant
Sep. 30, 2017
restaurant
Apr. 24, 2017
restaurant
Level 3                
Impairment and Other Lease Charges [Line Items]                
Level 3 assets measured at fair value | $   $ 5.8 $ 8.0          
Pollo Tropical                
Impairment and Other Lease Charges [Line Items]                
Number of closed restaurants     14         30
Number of restaurants, conversion   1 6          
Impairment charges | $   $ 0.8 $ 13.1          
Lease and other charges | $   $ (0.8) $ 0.5 $ 5.4        
Number of closed restaurants, impaired in prior period     2 7        
Number of impaired restaurants the company continues to operate     1 2        
Number of impaired restaurants       40        
Pollo Tropical | Operating Segments                
Impairment and Other Lease Charges [Line Items]                
Impairment charges | $       $ 52.1        
Pollo Tropical | South Texas                
Impairment and Other Lease Charges [Line Items]                
Number of closed restaurants             6  
Pollo Tropical | Georgia                
Impairment and Other Lease Charges [Line Items]                
Number of closed restaurants       4        
Taco Cabana                
Impairment and Other Lease Charges [Line Items]                
Number of closed restaurants   1 9 6   2    
Impairment charges | $   $ 13.2 $ 6.0          
Lease and other charges | $   $ (0.1) $ 1.6 $ 1.6        
Number of closed restaurants, impaired in prior period     1   4      
Number of impaired restaurants the company continues to operate     6 5        
Taco Cabana | Operating Segments                
Impairment and Other Lease Charges [Line Items]                
Impairment charges | $       $ 1.9        
Taco Cabana | Subsequent Event                
Impairment and Other Lease Charges [Line Items]                
Number of closed restaurants 19              
Number of closed restaurants, impaired in prior period 5              
Other | Other                
Impairment and Other Lease Charges [Line Items]                
Impairment charges | $       0.2        
Lease and other charges | $       $ 0.5        
v3.19.3.a.u2
Other Liabilities - Current (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Other Liabilities Disclosure [Abstract]    
Operating lease liabilities $ 22,338 $ 0
Accrued workers' compensation and general liability claims 4,354 4,886
Sales and property taxes 1,889 1,958
Accrued occupancy costs 891 4,554
Other 2,797 2,688
Other liabilities, current $ 32,269 $ 14,086
v3.19.3.a.u2
Other Liabilities - Noncurrent (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Other Liabilities Disclosure [Abstract]    
Accrued occupancy costs $ 78 $ 21,534
Accrued workers' compensation and general liability claims 7,348 6,808
Deferred compensation 424 867
Other 555 3,295
Other liabilities, long-term $ 8,405 $ 32,504
v3.19.3.a.u2
Other Liabilities - Narrative (Details) - Closed Stores - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Restructuring Cost and Reserve [Line Items]      
Closed-store reserve $ 752 $ 8,819 $ 12,994
Other Liabilities, Noncurrent      
Restructuring Cost and Reserve [Line Items]      
Closed-store reserve $ 100 $ 4,400  
v3.19.3.a.u2
Other Liabilities - Restructuring Reserve (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Activity in the Closed-Store Reserve    
Operating lease cost $ 45,414  
Closed Stores    
Activity in the Closed-Store Reserve    
Balance, beginning of period 8,819 $ 12,994
Provisions for restaurant closures 0 2,228
Additional lease charges (recoveries), net 0 (152)
Payments, net (1,405) (6,778)
Other adjustments (6,662) 527
Balance, end of period 752 $ 8,819
Operating lease cost $ 6,000  
v3.19.3.a.u2
Leases - Narrative (Details)
12 Months Ended
Dec. 29, 2019
lease
Lessee, Lease, Description [Line Items]  
Lease term 20 years
Number of leases for restaurant properties that had not yet commenced 5
Lease term of leases not yet commenced 15 years
Sublease includes options to extend sublease term, up to 25 years
Minimum  
Lessee, Lease, Description [Line Items]  
Lease term 20 years
Remaining lease term 3 months 18 days
Sublease, remaining lease term 2 years 3 months 18 days
Maximum  
Lessee, Lease, Description [Line Items]  
Lease term 40 years
Remaining lease term 21 years 9 months 18 days
Sublease, remaining lease term 19 years 4 months 24 days
v3.19.3.a.u2
Leases - Lease Expense (Details)
$ in Thousands
12 Months Ended
Dec. 29, 2019
USD ($)
Leases [Abstract]  
Operating lease cost $ 45,414
Finance lease costs:  
Amortization of right-of-use assets 202
Interest on lease liabilities 226
Total finance lease costs 428
Variable lease costs 12,050
Sublease income (4,037)
Total lease costs $ 53,855
v3.19.3.a.u2
Leases - Supplemental Balance Sheet Information (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Operating Leases    
Operating lease right-of-use assets $ 251,272 $ 0
Other current liabilities 22,338 0
Operating lease liabilities 256,798 $ 0
Total operating lease liabilities 279,136  
Finance Leases    
Property and equipment, gross 2,713  
Accumulated amortization (1,323)  
Property and equipment, net 1,390  
Current portion of long-term debt 212  
Long-term debt, net of current portion 1,823  
Total finance lease liabilities $ 2,035  
Weighted Average Remaining Lease Term (in Years)    
Operating leases 12 years 1 month 6 days  
Finance leases 7 years 10 months 24 days  
Weighted Average Discount Rate    
Operating leases 7.67%  
Finance leases 12.67%  
v3.19.3.a.u2
Leases - Supplemental Cash Flow Information (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash flows for operating leases $ 41,216  
Operating cash flows for finance leases 226  
Financing cash flows for finance leases 164  
Right-of-use assets obtained in exchange for lease liabilities:    
Operating lease ROU assets 12,654  
Finance lease ROU assets 495  
Right-of-use assets and lease liabilities reduced for terminated leases:    
Operating lease ROU assets 4,372  
Operating lease liabilities 5,126  
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Operating lease ROU assets 251,272 $ 0
Operating lease liabilities 279,136  
ASU 2016-02    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Operating lease ROU assets 267,743  
Operating lease liabilities $ 291,373  
v3.19.3.a.u2
Leases - Maturities of Lease Liabilities (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Operating Leases    
2020 $ 42,479  
2021 40,189  
2022 38,917  
2023 35,742  
2024 32,481  
Thereafter 251,977  
Total lease payments 441,785  
Less amount representing interest (162,649)  
Total operating lease liabilities 279,136  
Less current portion (22,338) $ 0
Long-term portion of lease liabilities 256,798 $ 0
Finance Leases    
2020 434  
2021 475  
2022 475  
2023 428  
2024 350  
Thereafter 1,278  
Total lease payments 3,440  
Less amount representing interest (1,405)  
Total finance lease liabilities 2,035  
Less current portion (212)  
Long-term portion of lease liabilities $ 1,823  
v3.19.3.a.u2
Leases - Minimum Rent Commitments Under Capital and Non-Cancelable Operating Leases (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Operating    
2019   $ 44,427
2020   44,144
2021   41,396
2022   40,215
2023   36,587
Thereafter   264,704
Total minimum lease payments   471,473
Capital    
2019   323
2020   327
2021   342
2022   342
2023   349
Thereafter   1,646
Total minimum lease payments   3,329
Less amount representing interest   (1,585)
Total obligations under capital leases $ 2,035 1,744
Less current portion   (108)
Long-term debt under capital leases   1,636
Future minimum sublease rentals   $ 41,400
v3.19.3.a.u2
Leases - Operating Subleases (Details)
$ in Thousands
Dec. 29, 2019
USD ($)
Operating Leases  
2020 $ 4,651
2021 4,878
2022 4,833
2023 4,828
2024 4,884
Thereafter 45,031
Total $ 69,105
v3.19.3.a.u2
Leases - Rent Expense, Operating Leases (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Operating Leased Assets [Line Items]      
Restaurant rent expense $ 47,805 $ 36,034 $ 36,936
Total rent expense on operating leases   37,745 38,780
Operating Expense      
Operating Leased Assets [Line Items]      
Minimum rent on real property   35,881 36,760
Additional rent based on percentage of sales   153 176
Restaurant rent expense   36,034 36,936
Pre-Opening Costs      
Operating Leased Assets [Line Items]      
Minimum rent on real property   861 856
General and Administrative Expense      
Operating Leased Assets [Line Items]      
Minimum rent on real property   $ 850 $ 988
v3.19.3.a.u2
Long-term Debt - Schedule of Long-Term Debt (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Debt Disclosure [Abstract]    
Revolving credit facility $ 75,000 $ 78,000
Finance/capital leases 2,035 1,744
Long-term debt and capital lease obligations 77,035 79,744
Less: current portion of long-term debt (212) (108)
Long-term debt and capital lease obligations, net of current portion $ 76,823 $ 79,636
v3.19.3.a.u2
Long-term Debt - Senior Credit Facility (Details) - USD ($)
12 Months Ended
Nov. 30, 2017
Dec. 29, 2019
Dec. 30, 2018
Line of Credit Facility [Line Items]      
Outstanding revolving credit borrowings   $ 75,000,000 $ 78,000,000
Outstanding letters of credit   3,700,000  
Revolving Credit      
Line of Credit Facility [Line Items]      
Remaining borrowing capacity   $ 71,300,000  
Revolving Credit | November 2017 Senior Credit Facility      
Line of Credit Facility [Line Items]      
Senior credit facility, issuance date Nov. 30, 2017    
Senior credit facility, maximum borrowing capacity $ 150,000,000.0    
Senior credit facility, maturity date Nov. 30, 2022    
Commitment fee margin   0.30%  
Cross default provision, minimum debt principal amount $ 5,000,000    
Revolving Credit | November 2017 Senior Credit Facility | Alternative Base Rate      
Line of Credit Facility [Line Items]      
Applicable margin   1.25%  
Revolving Credit | November 2017 Senior Credit Facility | LIBOR      
Line of Credit Facility [Line Items]      
Applicable margin   2.25%  
Revolving Credit | November 2017 Senior Credit Facility | Maximum      
Line of Credit Facility [Line Items]      
Senior credit facility, potential incremental increase $ 50,000,000.0    
Commitment fee margin 0.35%    
Revolving Credit | November 2017 Senior Credit Facility | Maximum | Alternative Base Rate      
Line of Credit Facility [Line Items]      
Applicable margin 1.50%    
Revolving Credit | November 2017 Senior Credit Facility | Maximum | LIBOR      
Line of Credit Facility [Line Items]      
Applicable margin 2.50%    
Revolving Credit | November 2017 Senior Credit Facility | Minimum      
Line of Credit Facility [Line Items]      
Commitment fee margin 0.25%    
Revolving Credit | November 2017 Senior Credit Facility | Minimum | Alternative Base Rate      
Line of Credit Facility [Line Items]      
Applicable margin 0.75%    
Revolving Credit | November 2017 Senior Credit Facility | Minimum | LIBOR      
Line of Credit Facility [Line Items]      
Applicable margin 1.75%    
Letters of Credit | November 2017 Senior Credit Facility      
Line of Credit Facility [Line Items]      
Senior credit facility, maximum borrowing capacity $ 15,000,000.0    
v3.19.3.a.u2
Long-term Debt - Other Disclosures (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Debt Instrument [Line Items]      
Interest expense $ 3,872 $ 3,966 $ 2,877
Revolving Credit      
Debt Instrument [Line Items]      
Principal payments required on borrowings in 2022 $ 75,000    
Weighted average interest rate 4.04% 4.59%  
Interest expense $ 3,700 $ 3,900 $ 2,700
v3.19.3.a.u2
Income Taxes - Income Tax Provision (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Current:      
Federal $ (2,347) $ (10,378) $ (5,718)
Foreign 336 355 346
State 492 421 445
Current (1,519) (9,602) (4,927)
Deferred:      
Federal (2,132) 6,591 (1,059)
State (425) 297 (1,649)
Deferred (2,557) 6,888 (2,708)
Valuation allowance 13,445 (58) (120)
Provision for income taxes $ 9,369 $ (2,772) $ (7,755)
v3.19.3.a.u2
Income Taxes - Components of Deferred Taxes (Details) - USD ($)
$ in Thousands
Dec. 29, 2019
Dec. 30, 2018
Deferred income tax assets:    
Accrued vacation benefits $ 875 $ 1,017
Incentive compensation 1,024 959
Other accruals 2,804 2,976
Deferred income on sale-leaseback of real estate 0 4,591
Operating lease liabilities 65,251 0
Occupancy costs 175 6,038
Tax credit carryforwards 1,949 1,534
Federal net operating loss 2,770 1,040
Other 973 839
Gross deferred income tax assets 75,821 18,994
Deferred income tax liabilities:    
Right-of-use operating lease assets (58,524) 0
Property and equipment depreciation (6,509) (5,438)
Amortization of other intangibles, net (34) (2,121)
Cloud-based software deferred costs (990) 0
Other (400) (374)
Gross deferred income tax liabilities (66,457) (7,933)
Less: Valuation allowance (14,123) (678)
Net deferred tax liabilities $ (4,759)  
Net deferred income tax assets   $ 10,383
v3.19.3.a.u2
Income Taxes - Narrative (Details) - USD ($)
3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 30, 2018
Dec. 31, 2017
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Operating Loss Carryforwards [Line Items]            
Change in valuation allowance       $ 13,445,000 $ (58,000) $ (120,000)
Valuation allowance $ 14,123,000     $ 14,123,000 $ 678,000  
Effective income tax rate       (12.50%) (55.30%) 17.60%
Change in federal income tax rate and tax methods   $ (3,900,000) $ 9,000,000.0 $ (716,000) $ (3,977,000) $ 8,952,000
Unrecognized tax benefits 0     0 0  
Accrued interest related to uncertain tax positions 0     0 $ 0  
Deferred tax benefits related to federal net operating loss carryforwards with no expiration date 2,800,000     2,800,000    
Net operating loss carryforwards, employment tax credits 1,300,000     1,300,000    
Reduced value of employment tax credits if unutilized after various times beginning 2038 300,000     300,000    
Deferred tax benefit related to state net operating loss carryforwards 400,000     $ 400,000    
Federal            
Operating Loss Carryforwards [Line Items]            
Change in valuation allowance 10,300,000          
State            
Operating Loss Carryforwards [Line Items]            
Change in valuation allowance $ 3,200,000          
v3.19.3.a.u2
Income Taxes - Income Tax Rate Reconciliation (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Sep. 30, 2018
Dec. 31, 2017
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Income Tax Disclosure [Abstract]          
Statutory federal income tax provision (benefit)     $ (15,753) $ 1,053 $ (15,394)
State income taxes, net of federal benefit     49 552 (734)
Change in valuation allowance     13,445 (58) (120)
Change in federal income tax rate and tax methods $ (3,900) $ 9,000 (716) (3,977) 8,952
Net share-based compensation-tax benefit deficiencies     235 178 228
Non-deductible goodwill     12,357 0 0
Non-deductible expenses     214 53 84
Foreign taxes     336 355 346
Employment tax credits     (381) (897) (914)
Foreign tax credits/deductions     (71) (75) (121)
Other     (346) 44 (82)
Provision for income taxes     $ 9,369 $ (2,772) $ (7,755)
v3.19.3.a.u2
Stockholders' Equity - Purchase of Treasury Stock (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Feb. 26, 2018
Equity, Class of Treasury Stock [Line Items]      
Number of shares authorized to be repurchased 3,000,000    
Treasury stock purchases (in shares) 1,381,137 112,358  
Treasury stock purchases $ 14,282 $ 2,769  
Share Repurchase Program 2018      
Equity, Class of Treasury Stock [Line Items]      
Number of shares authorized to be repurchased     1,500,000
Share Repurchase Program 2019      
Equity, Class of Treasury Stock [Line Items]      
Number of shares authorized to be repurchased 1,500,000    
v3.19.3.a.u2
Stockholders' Equity - Stock-Based Compensation (Details)
$ / shares in Units, $ in Millions
12 Months Ended
Dec. 29, 2019
USD ($)
tranche
$ / shares
shares
Dec. 30, 2018
USD ($)
tranche
$ / shares
shares
Dec. 31, 2017
USD ($)
tranche
day
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares of stock authorized for distribution 3,300,000    
Number of shares available for future grants 1,467,699    
Stock-based compensation | $ $ 2.8 $ 3.5 $ 3.5
Unrecognized stock-based compensation expense | $ 4.0    
Fair value of the shares vested and released | $ $ 1.8 $ 2.5 $ 2.1
Nonvested Restricted Shares      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares granted in period 287,002    
Weighted average grant date fair value, grants in period (usd per share) | $ / shares $ 13.00    
Remaining weighted average vesting period 2 years 4 months 24 days    
Nonvested Restricted Shares | Employee      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares granted in period 243,948 161,791 182,522
Vesting period 4 years 4 years 4 years
Weighted average grant date fair value, grants in period (usd per share) | $ / shares $ 13.06 $ 18.70 $ 20.75
Nonvested Restricted Shares | Consultant      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Vesting period 3 years 3 years  
Nonvested Restricted Shares | Director      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares granted in period 43,054 31,146 38,596
Weighted average grant date fair value, grants in period (usd per share) | $ / shares $ 12.66 $ 20.71 $ 21.25
Nonvested Restricted Shares | Director | Vesting 1      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Vesting period 1 year 1 year 1 year
Nonvested Restricted Shares | Director | Vesting 2      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Vesting period   5 years 5 years
Restricted Stock Units      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares granted in period 15,348    
Weighted average grant date fair value, grants in period (usd per share) | $ / shares $ 1.76    
Remaining weighted average vesting period 8 months 12 days    
Restricted Stock Units | Employee      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares granted in period     11,745
Vesting period     4 years
Weighted average grant date fair value, grants in period (usd per share) | $ / shares     $ 20.75
Market Performance-Based Restricted Stock Units (RSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares granted in period 15,348 112,169 92,171
Market Performance-Based Restricted Stock Units (RSUs) | Chief Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares granted in period     72,290
Vesting period     4 years
Weighted average grant date fair value, grants in period (usd per share) | $ / shares     $ 12.90
Number of tranches | tranche     4
Threshold consecutive trading days | day     20
Market Performance-Based Restricted Stock Units (RSUs) | Chief Executive Officer | Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Shares to be issued at end of performance period     0
Market Performance-Based Restricted Stock Units (RSUs) | Chief Executive Officer | Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Shares to be issued at end of performance period     72,290
Market Performance-Based Restricted Stock Units (RSUs) | Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Aggregate number of shares granted in period 15,348 112,169 19,881
Vesting period 2 years   3 years
Weighted average grant date fair value, grants in period (usd per share) | $ / shares $ 1.76 $ 6.96 $ 9.31
Number of tranches | tranche 2 3 3
Market Performance-Based Restricted Stock Units (RSUs) | Executive Officer | Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Shares to be issued at end of performance period 0   0
Market Performance-Based Restricted Stock Units (RSUs) | Executive Officer | Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Shares to be issued at end of performance period 15,348 112,169 19,881
v3.19.3.a.u2
Stockholders' Equity - Nonvested Shares and Restricted Stock Units Activity Table (Details)
12 Months Ended
Dec. 29, 2019
$ / shares
shares
Non-Vested Shares  
Non-Vested Shares and Restricted Stock Units  
Outstanding at beginning of period (in shares) | shares 287,866
Granted (in shares) | shares 287,002
Vested/Released (in shares) | shares (131,185)
Forfeited (in shares) | shares (88,078)
Outstanding at end of period (in shares) | shares 355,605
Weighted Average Grant Date Fair Value  
Outstanding at beginning of period (usd per share) | $ / shares $ 20.70
Granted (usd per share) | $ / shares 13.00
Vested/Released (usd per share) | $ / shares 20.30
Forfeited (usd per share) | $ / shares 17.02
Outstanding at end of period (usd per share) | $ / shares $ 15.47
Restricted Stock Units  
Non-Vested Shares and Restricted Stock Units  
Outstanding at beginning of period (in shares) | shares 231,112
Granted (in shares) | shares 15,348
Vested/Released (in shares) | shares (3,516)
Forfeited (in shares) | shares (66,582)
Outstanding at end of period (in shares) | shares 176,362
Weighted Average Grant Date Fair Value  
Outstanding at beginning of period (usd per share) | $ / shares $ 12.44
Granted (usd per share) | $ / shares 1.76
Vested/Released (usd per share) | $ / shares 62.05
Forfeited (usd per share) | $ / shares 15.34
Outstanding at end of period (usd per share) | $ / shares $ 9.42
v3.19.3.a.u2
Stockholders' Equity - Restricted Stock Units Subject to Market Conditions (Details) - Market Performance-Based Restricted Stock Units (RSUs) - $ / shares
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Grant date stock price (usd per share) $ 14.66 $ 18.70 $ 17.60
Fair value at grant date (usd per share) $ 1.76 $ 6.96 $ 9.31
Risk free interest rate 2.53% 2.40% 1.51%
Expected term (in years) 2 years 3 years 2 years 6 months
Dividend yield 0.00% 0.00% 0.00%
Expected volatility 43.18% 41.49% 41.72%
Chief Executive Officer      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Grant date stock price (usd per share)     $ 22.55
Fair value at grant date (usd per share)     $ 12.90
Risk free interest rate     1.52%
Expected term (in years)     3 years 9 months 18 days
Dividend yield     0.00%
Expected volatility     39.06%
v3.19.3.a.u2
Business Segment Information - Segment Reporting Information, by Segment (Details)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 29, 2019
USD ($)
Sep. 29, 2019
USD ($)
Jun. 30, 2019
USD ($)
Mar. 31, 2019
USD ($)
Dec. 30, 2018
USD ($)
Sep. 30, 2018
USD ($)
Jul. 01, 2018
USD ($)
Apr. 01, 2018
USD ($)
Dec. 29, 2019
USD ($)
segment
Dec. 30, 2018
USD ($)
Dec. 31, 2017
USD ($)
Segment Reporting [Abstract]                      
Number of operating segments | segment                 2    
Segment Reporting Information [Line Items]                      
Revenues $ 159,462 $ 164,248 $ 171,381 $ 165,852 $ 167,638 $ 174,648 $ 176,827 $ 169,484 $ 660,943 $ 688,597 $ 669,132
Cost of sales                 207,453 218,946 202,888
Restaurant wages and related expenses                 179,178 188,131 184,742
Restaurant rent expense                 47,805 36,034 36,936
Other restaurant operating expenses                 91,897 100,828 98,927
Advertising expense                 23,179 23,695 26,091
General and administrative expense                 56,195 54,525 59,633
Adjusted EBITDA                 58,449 67,962 67,445
Depreciation and amortization                 39,195 37,604 34,957
Capital expenditures                 41,247 57,850 55,866
Identifiable assets 568,641       418,659       568,641 418,659 423,313
Stock-based compensation                 2,800 3,500 3,500
Restaurant Wages And Related Expenses                      
Segment Reporting Information [Line Items]                      
Stock-based compensation                 195 90 52
General and Administrative Expense                      
Segment Reporting Information [Line Items]                      
Stock-based compensation                 2,649 3,379 3,493
Restaurant Sales                      
Segment Reporting Information [Line Items]                      
Revenues                 658,263 685,925 666,584
Franchise Revenue                      
Segment Reporting Information [Line Items]                      
Revenues                 2,680 2,672 2,548
Operating Segments | Pollo Tropical                      
Segment Reporting Information [Line Items]                      
Cost of sales                 115,119 123,042 117,493
Restaurant wages and related expenses                 84,909 87,025 88,587
Restaurant rent expense                 22,050 17,457 18,949
Other restaurant operating expenses                 49,768 51,757 52,848
Advertising expense                 12,358 13,068 16,397
General and administrative expense                 31,023 29,621 33,025
Adjusted EBITDA                 50,560 54,903 50,937
Depreciation and amortization                 21,476 21,372 21,758
Capital expenditures                 21,921 27,667 31,786
Identifiable assets 340,012       207,435       340,012 207,435 227,194
Operating Segments | Pollo Tropical | Restaurant Wages And Related Expenses                      
Segment Reporting Information [Line Items]                      
Stock-based compensation                 70 34 (4)
Operating Segments | Pollo Tropical | General and Administrative Expense                      
Segment Reporting Information [Line Items]                      
Stock-based compensation                 1,590 1,885 1,983
Operating Segments | Pollo Tropical | Restaurant Sales                      
Segment Reporting Information [Line Items]                      
Revenues                 361,693 374,381 372,328
Operating Segments | Pollo Tropical | Franchise Revenue                      
Segment Reporting Information [Line Items]                      
Revenues                 1,780 1,815 1,787
Operating Segments | Taco Cabana                      
Segment Reporting Information [Line Items]                      
Cost of sales                 92,334 95,904 85,395
Restaurant wages and related expenses                 94,269 101,106 96,155
Restaurant rent expense                 25,755 18,577 17,987
Other restaurant operating expenses                 42,129 49,071 46,079
Advertising expense                 10,821 10,627 9,694
General and administrative expense                 25,172 24,904 26,608
Adjusted EBITDA                 7,889 13,059 16,508
Depreciation and amortization                 17,719 16,232 13,199
Capital expenditures                 18,023 28,886 20,781
Identifiable assets 195,883       174,681       195,883 174,681 167,237
Operating Segments | Taco Cabana | Restaurant Wages And Related Expenses                      
Segment Reporting Information [Line Items]                      
Stock-based compensation                 125 56 56
Operating Segments | Taco Cabana | General and Administrative Expense                      
Segment Reporting Information [Line Items]                      
Stock-based compensation                 1,059 1,494 1,510
Operating Segments | Taco Cabana | Restaurant Sales                      
Segment Reporting Information [Line Items]                      
Revenues                 296,570 311,544 294,256
Operating Segments | Taco Cabana | Franchise Revenue                      
Segment Reporting Information [Line Items]                      
Revenues                 900 857 761
Other                      
Segment Reporting Information [Line Items]                      
Cost of sales                 0 0 0
Restaurant wages and related expenses                 0 0 0
Restaurant rent expense                 0 0 0
Other restaurant operating expenses                 0 0 0
Advertising expense                 0 0 0
General and administrative expense                 0 0 0
Adjusted EBITDA                 0 0 0
Depreciation and amortization                 0 0 0
Capital expenditures                 1,303 1,297 3,299
Identifiable assets $ 32,746       $ 36,543       32,746 36,543 28,882
Other | Restaurant Sales                      
Segment Reporting Information [Line Items]                      
Revenues                 0 0 0
Other | Franchise Revenue                      
Segment Reporting Information [Line Items]                      
Revenues                 $ 0 $ 0 $ 0
v3.19.3.a.u2
Business Segment Information - Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA (Details) - USD ($)
3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Segment Reporting Information [Line Items]                      
Net income (loss) $ (21,053,000) $ (22,182,000) $ (43,440,000) $ 2,289,000 $ (7,937,000) $ 2,047,000 $ 9,493,000 $ 4,184,000 $ (84,386,000) $ 7,787,000 $ (36,232,000)
Provision for (benefit from) income taxes                 9,369,000 (2,772,000) (7,755,000)
Income (loss) before income taxes                 (75,017,000) 5,015,000 (43,987,000)
Non-general and administrative expense adjustments:                      
Depreciation and amortization                 39,195,000 37,604,000 34,957,000
Impairment and other lease charges $ 8,400,000 $ 3,300,000 $ 1,800,000 $ (300,000) $ 14,600,000 $ 6,400,000 $ 800,000 $ (700,000) 13,101,000 21,144,000 61,760,000
Goodwill impairment                 67,909,000 0 0
Interest expense                 3,872,000 3,966,000 2,877,000
Closed restaurant rent expense, net of sublease income                 4,163,000 0 0
Other expense (income), net                 1,041,000 (3,007,000) 2,190,000
Stock-based compensation expense                 2,800,000 3,500,000 3,500,000
Unused pre-production costs in advertising expense                     410,000
Total non-general and administrative expense adjustments                 129,476,000 59,797,000 102,246,000
General and administrative expense adjustments:                      
Stock-based compensation expense                 2,800,000 3,500,000 3,500,000
Terminated capital project                     849,000
Board and shareholder matter costs                   (597,000) 3,049,000
Restructuring, relocation and retentions costs                 964,000 545,000 (152,000)
Legal settlements and related costs                   (177,000) (473,000)
Digital and brand repositioning costs                 377,000    
Total general and administrative expense adjustments                 3,990,000 3,150,000 9,186,000
Adjusted EBITDA                 58,449,000 67,962,000 67,445,000
Renewal Plan                      
General and administrative expense adjustments:                      
Restructuring, relocation and retentions costs                     2,420,000
Restaurant Wages And Related Expenses                      
Non-general and administrative expense adjustments:                      
Stock-based compensation expense                 195,000 90,000 52,000
General and administrative expense adjustments:                      
Stock-based compensation expense                 195,000 90,000 52,000
General and Administrative Expense                      
Non-general and administrative expense adjustments:                      
Stock-based compensation expense                 2,649,000 3,379,000 3,493,000
General and administrative expense adjustments:                      
Stock-based compensation expense                 2,649,000 3,379,000 3,493,000
Pollo Tropical                      
Non-general and administrative expense adjustments:                      
Impairment and other lease charges                 15,000 13,587,000 57,947,000
Goodwill impairment                 0    
Taco Cabana                      
Non-general and administrative expense adjustments:                      
Impairment and other lease charges                 13,086,000 7,557,000 3,813,000
Goodwill impairment                 67,177,000    
Operating Segments | Pollo Tropical                      
Segment Reporting Information [Line Items]                      
Income (loss) before income taxes                 20,300,000 17,639,000 (37,831,000)
Non-general and administrative expense adjustments:                      
Depreciation and amortization                 21,476,000 21,372,000 21,758,000
Impairment and other lease charges                 15,000 13,587,000 57,947,000
Goodwill impairment                 0    
Interest expense                 1,953,000 1,920,000 1,348,000
Closed restaurant rent expense, net of sublease income                 3,260,000    
Other expense (income), net                 862,000 (1,225,000) 2,427,000
Unused pre-production costs in advertising expense                     322,000
Total non-general and administrative expense adjustments                 27,636,000 35,688,000 83,798,000
General and administrative expense adjustments:                      
Terminated capital project                     484,000
Board and shareholder matter costs                   (328,000) 1,738,000
Restructuring, relocation and retentions costs                 827,000 196,000 (152,000)
Legal settlements and related costs                   (177,000) (473,000)
Digital and brand repositioning costs                 207,000    
Total general and administrative expense adjustments                 2,624,000 1,576,000 4,970,000
Adjusted EBITDA                 50,560,000 54,903,000 50,937,000
Operating Segments | Pollo Tropical | Renewal Plan                      
General and administrative expense adjustments:                      
Restructuring, relocation and retentions costs                     1,390,000
Operating Segments | Pollo Tropical | Restaurant Wages And Related Expenses                      
Non-general and administrative expense adjustments:                      
Stock-based compensation expense                 70,000 34,000 (4,000)
General and administrative expense adjustments:                      
Stock-based compensation expense                 70,000 34,000 (4,000)
Operating Segments | Pollo Tropical | General and Administrative Expense                      
Non-general and administrative expense adjustments:                      
Stock-based compensation expense                 1,590,000 1,885,000 1,983,000
General and administrative expense adjustments:                      
Stock-based compensation expense                 1,590,000 1,885,000 1,983,000
Operating Segments | Taco Cabana                      
Segment Reporting Information [Line Items]                      
Income (loss) before income taxes                 (95,317,000) (12,624,000) (6,156,000)
Non-general and administrative expense adjustments:                      
Depreciation and amortization                 17,719,000 16,232,000 13,199,000
Impairment and other lease charges                 13,086,000 7,557,000 3,813,000
Goodwill impairment                 67,909,000    
Interest expense                 1,919,000 2,046,000 1,529,000
Closed restaurant rent expense, net of sublease income                 903,000    
Other expense (income), net                 179,000 (1,782,000) (237,000)
Unused pre-production costs in advertising expense                     88,000
Total non-general and administrative expense adjustments                 101,840,000 24,109,000 18,448,000
General and administrative expense adjustments:                      
Terminated capital project                     365,000
Board and shareholder matter costs                   (269,000) 1,311,000
Restructuring, relocation and retentions costs                 137,000 349,000 0
Legal settlements and related costs                   0 0
Digital and brand repositioning costs                 170,000    
Total general and administrative expense adjustments                 1,366,000 1,574,000 4,216,000
Adjusted EBITDA                 7,889,000 13,059,000 16,508,000
Operating Segments | Taco Cabana | Renewal Plan                      
General and administrative expense adjustments:                      
Restructuring, relocation and retentions costs                     1,030,000
Operating Segments | Taco Cabana | Restaurant Wages And Related Expenses                      
Non-general and administrative expense adjustments:                      
Stock-based compensation expense                 125,000 56,000 56,000
General and administrative expense adjustments:                      
Stock-based compensation expense                 125,000 56,000 56,000
Operating Segments | Taco Cabana | General and Administrative Expense                      
Non-general and administrative expense adjustments:                      
Stock-based compensation expense                 1,059,000 1,494,000 1,510,000
General and administrative expense adjustments:                      
Stock-based compensation expense                 $ 1,059,000 $ 1,494,000 $ 1,510,000
v3.19.3.a.u2
Earnings (Loss) Per Share - Narrative (Details)
12 Months Ended
Dec. 30, 2018
shares
Dec. 29, 2019
Earnings Per Share [Abstract]    
Nonvested restricted shares right to receive dividends, per share ratio to common shares   1
Restricted Stock Units    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Weighted average antidilutive securities excluded from computation of diluted earnings per share (in shares) 560  
v3.19.3.a.u2
Earnings (Loss) Per Share - Computation of Basic and Diluted Net Income per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Basic and diluted EPS:                      
Net income (loss) $ (21,053) $ (22,182) $ (43,440) $ 2,289 $ (7,937) $ 2,047 $ 9,493 $ 4,184 $ (84,386) $ 7,787 $ (36,232)
Less: income allocated to participating securities                 0 85 0
Net income (loss) available to common stockholders                 $ (84,386) $ 7,702 $ (36,232)
Weighted average common shares—basic                 26,500,356 26,890,577 26,821,471
Restricted stock units (in shares)                 0 3,506 0
Weighted average common shares—diluted                 26,500,356 26,894,083 26,821,471
Earnings (loss) per common share—basic (usd per share) $ (0.82) $ (0.84) $ (1.62) $ 0.08 $ (0.30) $ 0.08 $ 0.35 $ 0.15 $ (3.18) $ 0.29 $ (1.35)
Earnings (loss) per common share—diluted (usd per share) $ (0.82) $ (0.84) $ (1.62) $ 0.08 $ (0.30) $ 0.08 $ 0.35 $ 0.15 $ (3.18) $ 0.29 $ (1.35)
v3.19.3.a.u2
Commitments and Contingencies - Lease Assignments (Details)
$ in Millions
Dec. 29, 2019
USD ($)
restaurant
Loss Contingencies [Line Items]  
Lease assignment maximum exposure | $ $ 3.2
Taco Cabana  
Loss Contingencies [Line Items]  
Number of subleases 2
Pollo Tropical  
Loss Contingencies [Line Items]  
Number of subleases 1
v3.19.3.a.u2
Commitments and Contingencies - Contingency Related to Insurance Recoveries (Details)
$ in Thousands
3 Months Ended 12 Months Ended
Oct. 01, 2017
restaurant
Dec. 29, 2019
USD ($)
Dec. 30, 2018
USD ($)
Dec. 31, 2017
USD ($)
Loss Contingencies [Line Items]        
Other income   $ (1,041) $ 3,007 $ (2,190)
Taco Cabana | Loss from the Hurricanes        
Loss Contingencies [Line Items]        
Recorded expected insurance proceeds       400
Insurance settlement proceeds     1,700  
Other income     1,400  
Taco Cabana | Loss from the Hurricanes | Houston        
Loss Contingencies [Line Items]        
Number of restaurants affected by the hurricanes | restaurant 43      
Pollo Tropical | Loss from the Hurricanes        
Loss Contingencies [Line Items]        
Recorded expected insurance proceeds       $ 700
Insurance settlement proceeds     2,800  
Other income     $ 2,100  
Pollo Tropical | Loss from the Hurricanes | Houston        
Loss Contingencies [Line Items]        
Number of restaurants affected by the hurricanes | restaurant 2      
v3.19.3.a.u2
Retirement Plans (Details)
$ in Millions
12 Months Ended
Dec. 29, 2019
USD ($)
hour
Dec. 30, 2018
USD ($)
Dec. 31, 2017
USD ($)
Minimum      
Defined Contribution Plan Disclosure [Line Items]      
Vesting period for employer match 1 year    
Required hours of service | hour 1,000    
Maximum      
Defined Contribution Plan Disclosure [Line Items]      
Employer matching contribution, percent of match   50.00% 50.00%
Vesting period for employer match 5 years    
401K | Retirement Plan      
Defined Contribution Plan Disclosure [Line Items]      
Maximum employer contribution, percentage of eligible employee compensation 3.00%    
Maximum annual contribution per employee, percent 50.00%    
Retirement Plan employer matching expense $ 0.4 $ 0.5 $ 0.4
Interest rate that can be earned by deferred amounts 8.00%    
Deferred compensation, current and non-current $ 0.4 $ 0.9  
401K | Retirement Plan | Maximum      
Defined Contribution Plan Disclosure [Line Items]      
Employer matching contribution, percent of match 50.00%    
Employer matching contribution, percentage of employee compensation 6.00%    
v3.19.3.a.u2
Selected Quarterly Financial and Earnings Data (Unaudited) (Details) - USD ($)
3 Months Ended 12 Months Ended
Dec. 29, 2019
Sep. 29, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 30, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 31, 2017
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]                        
Revenues $ 159,462,000 $ 164,248,000 $ 171,381,000 $ 165,852,000 $ 167,638,000 $ 174,648,000 $ 176,827,000 $ 169,484,000   $ 660,943,000 $ 688,597,000 $ 669,132,000
Income (loss) from operations (9,459,000) (24,305,000) (41,850,000) 4,469,000 (9,476,000) (1,921,000) 13,500,000 6,878,000   (71,145,000) 8,981,000 (41,110,000)
Net income (loss) $ (21,053,000) $ (22,182,000) $ (43,440,000) $ 2,289,000 $ (7,937,000) $ 2,047,000 $ 9,493,000 $ 4,184,000   $ (84,386,000) $ 7,787,000 $ (36,232,000)
Earnings (loss) per common share—basic (usd per share) $ (0.82) $ (0.84) $ (1.62) $ 0.08 $ (0.30) $ 0.08 $ 0.35 $ 0.15   $ (3.18) $ 0.29 $ (1.35)
Earnings (loss) per common share—diluted (usd per share) $ (0.82) $ (0.84) $ (1.62) $ 0.08 $ (0.30) $ 0.08 $ 0.35 $ 0.15   $ (3.18) $ 0.29 $ (1.35)
Impairment and other lease charges $ 8,400,000 $ 3,300,000 $ 1,800,000 $ (300,000) $ 14,600,000 $ 6,400,000 $ 800,000 $ (700,000)   $ 13,101,000 $ 21,144,000 $ 61,760,000
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                        
Goodwill impairment                   67,909,000 0 0
Valuation allowance on deferred income tax assets $ 13,500,000                      
Change in federal income tax rate and tax methods           $ (3,900,000)     $ 9,000,000.0 $ (716,000) $ (3,977,000) $ 8,952,000
ASU 2017-04 | New Accounting Pronouncement, Early Adoption, Effect                        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                        
Goodwill impairment   21,400,000 $ 46,500,000                  
Goodwill impairment loss deductible for tax purposes   $ 9,100,000                    
v3.19.3.a.u2
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (Details) - Deferred income tax valuation allowance - USD ($)
$ in Thousands
12 Months Ended
Dec. 29, 2019
Dec. 30, 2018
Dec. 31, 2017
Movement in Valuation Allowances and Reserves      
Balance at beginning of period $ 678 $ 736 $ 856
Charged to costs and expenses 13,445 (58) (120)
Charged to other accounts 0 0 0
Deduction 0 0 0
Balance at end of period $ 14,123 $ 678 $ 736