Note 2 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 24, 2012

Significant Accounting Policies [Text Block]

(2)       Summary of Significant Accounting Policies

(a)       Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method. Cash flows related to inventory sales are classified in net cash provided by operating activities in the Consolidated Statements of Cash Flows.

We purchase products from a number of suppliers and believe there are alternative suppliers. We have minimum purchase commitments from some of our vendors, but the terms of the contracts and nature of the products are such that our purchase requirements do not create a market risk. The primary food product used by our restaurants and our franchised restaurants is chicken wings. Chicken wings are purchased by us at market prices. For the three-month periods ended June 24, 2012 and June 26, 2011, chicken wings were 27.1% and 16.4%, respectively, of restaurant cost of sales. For the six-month periods ended June 24, 2012 and June 26, 2011, chicken wings were 26.4% and 17.8%, respectively, of restaurant cost of sales.

(b)       New Accounting Pronouncements

We reviewed all significant newly-issued accounting pronouncements and concluded that they either are not applicable to our operations or that no material effect is expected on our consolidated financial statements as a result of future adoption.