Note 11 - Commitments and Contingencies

9 Months Ended

Aug. 25, 2018

Notes to Financial Statements

Legal Matters and Contingencies [Text Block]

 

11

.

Commitments and Contingencies

We are involved in various legal and environmental matters, which arise in the normal course of business. Although the final outcome of these matters cannot be determined, based on the facts presently known, we believe that the final resolution of these matters will

not

have a material adverse effect on our financial position or future results of operations.

We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of certain of our licensee-owned stores, and we lease land and buildings at various locations throughout the continental United States for warehousing and distribution hubs used in our logistical services segment. We also lease tractors, trailers and local delivery trucks used in our logistical services segment. Our real estate lease terms range from

one

to

15

years and generally have renewal options of between

five

and

15

years. Some store leases contain contingent rental provisions based upon sales volume. Our transportation equipment leases have terms ranging from

two

to

seven

years with fixed monthly rental payments plus variable charges based upon mileage. The following schedule shows future minimum lease payments under non-cancellable operating leases with terms in excess of

one

year as of

August 25, 2018:

	Retail Stores		Distribution Centers		Transportation Equipment		Total
Remainder of fiscal 2018	$	6,243	$	1,300	$	828	$	8,371
Fiscal 2019		25,697		4,237		3,398		33,332
Fiscal 2020		24,332		3,495		3,193		31,020
Fiscal 2021		21,206		2,771		2,153		26,130
Fiscal 2022		18,299		2,583		1,432		22,314
Fiscal 2023		15,448		1,517		637		17,602
Thereafter		46,000		437		558		46,995
Total future minimum lease payments	$	157,225	$	16,340	$	12,199	$	185,764

In connection with our long-term real estate leases, our liability for accrued straight-line rent expense was

$5,578

and

$4,821

at

August 25, 2018

and

November 25, 2017,

respectively, and is included in other accrued liabilities in our condensed consolidated balance sheets.

We also have guaranteed certain lease obligations of licensee operators. Lease guarantees range from

one

to

ten

years. We were contingently liable under licensee lease obligation guarantees in the amount of

$2,168

and

$2,743

at

August 25, 2018

and

November 25, 2017,

respectively.

In the event of default by an independent dealer under the guaranteed lease, we believe that the risk of loss is mitigated through a combination of options that include, but are

not

limited to, arranging for a replacement dealer, liquidating the collateral (primarily inventory), and pursuing payment under the personal guarantees of the independent dealer. The proceeds of the above options are expected to cover the estimated amount of our future payments under the guarantee obligations, net of recorded reserves. The fair value of lease guarantees (an estimate of the cost to the Company to perform on these guarantees) at

August 25, 2018

and

November 25, 2017

was

not

material.