Commitments and Contingencies

3 Months Ended

Mar. 29, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation and Other Matters - The Company had $3.3 million and $3.0 million of liabilities recorded for various legal matters as of March 29, 2020 and December 29, 2019, respectively.

The Company is subject to legal proceedings, claims and liabilities, such as liquor liability, slip and fall cases, wage-and-hour and other employment-related litigation, which arise in the ordinary course of business and are generally covered by insurance if they exceed specified retention or deductible amounts. In the opinion of management, the amount of ultimate liability with respect to those actions will not have a material adverse impact on the Company’s financial position or results of operations and cash flows.

Lease Guarantees - The Company assigned its interest, and is contingently liable, under certain real estate leases. These leases have varying terms, the latest of which expires in 2032. As of March 29, 2020, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $31.3 million. The present value of these potential payments discounted at the Company’s incremental borrowing rate as of

March 29, 2020 was approximately $24.9 million. In the event of default, the indemnity clauses in the Company’s purchase and sale agreements govern its ability to pursue and recover damages incurred.

In March 2020, the Company recorded $4.2 million of additional contingent lease liability in response to the economic impact of the COVID-19 pandemic. As of March 29, 2020, the Company’s recorded contingent lease liability was $9.7 million. See Note 2 - COVID-19 Impact for details regarding the impact of the COVID-19 pandemic on the Company’s financial results.