Company-owned Restaurant Transactions During the second fiscal quarter 2020, the Company completed the sale of two company-owned restaurants to an existing franchisee for aggregate proceeds of $2.3 million. In connection with the sale of the restaurants, the Company recorded a $2.0 million pre-tax gain on the sale of the related assets and liabilities, which was net of a $28,000 reduction in goodwill. The net gain on these store sales was recorded in Selling, general and administrative expense in the Companys Consolidated Statements of Operations. During the third fiscal quarter 2020, the Company completed the sale of five company-owned restaurants to an existing franchisee for aggregate proceeds of $2.5 million. In connection with the sale of the restaurants, the Company recorded a $1.2 million pre-tax gain on the sale of the related assets and liabilities, which was net of a $30,000 reduction in goodwill. The net gain on these restaurants was recorded in Selling, general and administrative expense in the Company's Consolidated Statements of Operations. On August 31, 2020, the Company acquired five existing restaurants from a franchisee. The total purchase price was $5.6 million, which was funded by cash flows from operations. The following table summarizes the preliminary allocations of the purchase price to the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition (in thousands): Purchase Price Allocation Working capital $ 35 Property and equipment 622 Reacquired franchise rights 1,816 Goodwill 3,162 Operating lease right-of-use assets 1,195 Operating lease liabilities (1,195) Total purchase price $ 5,635 The estimates of fair value are preliminary, and are therefore subject to further refinement. The excess of the purchase price over the aggregate fair value of assets acquired was allocated to goodwill and is attributable to the benefits expected as a result of the acquisition, including sales and unit growth opportunities. Approximately $3.2 million of the goodwill from the acquisition is expected to be deductible for federal income tax purposes. Pro-forma financial information of the combined entities is not presented due to the immaterial impact of the financial results of the acquired restaurant on our consolidated financial statements. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3 fair value measurement. Fair value measurements for reacquired franchise rights were determined using the income approach. Fair value measurements for property and equipment were determined using the cost approach.