Notes Receivable

9 Months Ended

Sep. 28, 2014

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Notes Receivable

Note 7.  Notes Receivable

In May and June 2013, the Company made loans to certain of its franchisees in the aggregate original principal amount of $40,507 to assist them with the payment of franchise fees owed to the Company and the payment of other business expenses incurred by the franchisees in running their respective restaurants.  The loans are for terms ranging from one year to three years in duration, are payable in monthly installments, and do not require the payment of any interest.  Payments in the aggregate amount of $1,320 and $9,467 were made against the loans during the three- and nine-month periods ended September 28, 2014, respectively.  Loans in the aggregate original principal amount of $10,507 remained outstanding at September 28, 2014, all of which are secured by equipment, licenses and other assets owned by the respective franchisees.

In December 2013, the Company loaned $6,000 to DWG Acquisitions, LLC, a Florida limited liability company (“DWG Acquisitions”).  The loan was interest free and payable on demand.  The loan was paid off in full by Blue Victory Holdings, Inc., a Nevada corporation (“Blue Victory”), during the nine-month period ended September 30, 2014.  The repayment was made by Blue Victory in the form of a reduction in the balance of the loans outstanding under the revolving line of credit facility that Blue Victory extended to the Company in September 2013.  A description of the credit facility is set forth herein under Note 8. Debt Obligations.

Between April and June 2014, the Company loaned $17,952 to DWG Acquisitions.  The loan was interest free and payable on demand. The loan was paid off in full by Blue Victory during the nine-month period ended September 30, 2014.  The repayment was made by Blue Victory in the form of a reduction in the balance of the loans outstanding under the revolving line of credit facility that Blue Victory extended to the Company in September 2013.  A description of the credit facility is set forth herein under Note 8. Debt Obligations. 

The carrying value of the Company’s outstanding notes receivable was $6,040 at September 28, 2014, all of which is reflected in cash flows from investing activities because the loans were not made in connection with the payment of franchise fees, royalties or other revenue owed to the Company.  The carrying value of the Company’s outstanding notes receivable was $21,507 at December 29, 2013.  A total of $7,500 of the notes receivable are reflected in cash flows from operating activities because the loans were made to assist the respective franchisees with the payment of franchisee fees owed to the Company.  The remaining balance of $14,007 of the notes receivable are reflected in cash flows from investing activities because the loans were not made in connection with the payment of franchise fees, royalties or other revenue owed to the Company.