Lease Termination Costs

6 Months Ended

Jul. 01, 2013

Lease Termination Costs

Lease Termination Costs

Note 5 — Lease Termination Costs

The lease termination costs incurred during the six months ended July 1, 2013 and July 2, 2012 relate to the closing of three and one location, respectively, during the periods reported. Future store closings, if any, resulting from our decision to close underperforming locations prior to their scheduled lease expiration dates may result in additional lease termination charges. For all exit activities, we estimate our likely liability under contractual leases for restaurants that have been closed. Such estimates have affected the amount and timing of charges to operating results and are impacted by management’s judgments about the time it may take to find a suitable subtenant or assignee, or the terms under which a termination of the lease agreement may be negotiated with the landlord. We recognize costs associated with exit or disposal activities at the time a commitment to an exit or disposal plan is communicated to the landlord.