Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

Commitments and Contingencies
12 Months Ended
Dec. 30, 2012
Commitments and Contingencies  
Commitments and Contingencies

12. Commitments and Contingencies


        Leasing Activities—The Company leases land, buildings, and equipment used in its operations under operating leases. The Company's operating leases have remaining non-cancelable terms ranging from less than one year to more than 15 years. These leases generally contain renewal options which permit the Company to renew the leases at defined contractual rates or prevailing market rates. Certain equipment leases also include options to purchase equipment at the end of the lease term. Certain leases provide for contingent rents, which are determined as a percentage of adjusted restaurant sales in excess of specified levels. The Company records a contingent rent liability and the corresponding rent expense when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. Certain lease agreements also require the Company to pay maintenance, insurance, and property tax costs. Rental expense related to land, building, and equipment leases is as follows (in thousands):

  2012   2011   2010  

Minimum rent

  $ 47,287   $ 43,756   $ 41,845  

Contingent rent

    1,861     1,821     1,632  

Equipment rent under operating leases

    788     748     740  


  $ 49,936   $ 46,325   $ 44,217  

        The Company leases certain of its owned land, buildings, and equipment to outside parties under non-cancelable operating leases. Cost of the leased land, buildings and equipment at the end of fiscal years 2012 and 2011 was $4.6 million in both periods, and related accumulated depreciation was $2.6 million and $2.4 million, respectively. Rental income was immaterial for fiscal years 2012, 2011 and 2010.

        Future minimum lease commitments and minimum rental income under all leases as of December 30, 2012 are as follows (in thousands):



  $ 1,310   $ 48,696   $ 150  


    1,246     48,404     150  


    930     46,825     150  


    862     43,996     38  


    900     40,891      


    8,350     157,259      


    13,598   $ 386,071   $ 488  

Less amount representing interest

    (3,603 )            

Present value of future minimum lease payments


Less current portion

    (784 )            

Long-term capital lease obligations

  $ 9,211              

        At the end of fiscal 2012 and 2011, property and equipment included $20.3 million and $20.0 million of assets under capital lease, respectively, and $7.3 million and $6.7 million of related accumulated depreciation, respectively.


        In the normal course of business, there are various claims in process, matters in litigation, and other contingencies. These include claims resulting from "slip and fall" accidents, employment related claims and claims alleging illness, injury or other food quality, health or operational issues. To date, no claims of these types of litigation, certain of which are covered by insurance policies, have had a material effect on us. While it is not possible to predict the outcome of these other suits, legal proceedings and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these other matters has been made in the financial statements and that the ultimate resolution of these other matters will not have a material effect on the Company's financial position and results of operations.