Commitments and Contingencies

9 Months Ended

Oct. 02, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 9 — Commitments and Contingencies

Litigation. The Company is a defendant in various legal proceedings arising in the ordinary course of business, including claims resulting from “slip and fall” accidents, employment-related claims, claims from guests or employees alleging illness, injury or other food quality, health or operational concerns and claims related to franchise matters. The Company establishes reserves to provide for the settlement of such matters when payment is probable and reasonably estimable. The Company’s management believes their ultimate resolution will not have a material adverse effect on the Company’s financial condition or its results of operations.

Insurance Programs. The Company carries property, general liability, business interruption, crime, directors and officers liability, employment practices liability, environmental and workers’ compensation insurance policies which it believes are customary for businesses of its size and type. Pursuant to the terms of their franchise agreements, the Company’s franchisees are also required to maintain certain types and levels of insurance coverage, including commercial general liability insurance, workers’ compensation insurance, all risk property and automobile insurance.

The Company has established reserves with respect to the programs described above based on the estimated total losses the Company will experience. At October 2, 2011, the Company’s insurance reserves of approximately $0.9 million were collateralized by letters of credit and/or cash deposits of $1.1 million.

Corporate Office Lease. We are relocating our corporate offices to take advantage of favorable market conditions. We signed a long term lease effective July 20, 2011. The Company entered into a non-cancellable operating lease for its new corporate office. The lease term is approximately eleven years and future minimum lease payments under the lease are approximately zero in 2011 and 2012, $0.7 million in 2013, $1.3 million in 2014 and 2015 and $10.0 million thereafter for the remaining term of the lease. The lease includes tenant improvements, design and move allowances of approximately $2.9 million.