Commitments and contingencies

3 Months Ended

Apr. 02, 2013

Commitments and contingencies

Commitments and contingencies

4. Commitments and contingencies

Leases

In June 2012, the Company entered into a 10-year lease agreement for a site in Indianapolis, Indiana where it is constructing a Granite City restaurant.  Per the terms of the lease, the landlord will pay the Company a tenant improvement allowance of approximately $1.1 million.  Through the build out or “rent holiday” period, the Company has recorded an aggregate of approximately $100,000 of non-cash rent expense in pre-opening costs.  Of such amount, approximately $54,000 was included in the first quarter of 2013.  The lease, which may be extended at the Company’s option for up to two additional five-year periods, calls for annual base rent starting at $210,000.  Under the terms of the lease, the Company may be required to pay additional contingent rent based upon restaurant sales.  The Company anticipates opening this restaurant in the third quarter of 2013.

In October 2012, the Company entered into a 10-year lease agreement for a site in Lyndhurst, Ohio where it plans to construct a Granite City restaurant.  Per the terms of the lease, the landlord will pay the Company a tenant improvement allowance of approximately $1.2 million.  The lease, which may be extended at the Company’s option for up to two additional five-year periods, calls for annual base rent starting at $456,850.  The Company anticipates opening this restaurant in the summer of 2013.  Under the terms of the lease, the Company may be required to pay additional contingent rent based upon restaurant sales.