Leases

As of January 1, 2019 and January 2, 2018, deferred rent liability was $16.6 million and $17.4 million, respectively, which includes unfavorable lease liabilities of $12.0 million and $14.5 million, respectively, net of accumulated amortization of $7.2 million and $6.1 million, respectively.

Franchise sublease income which includes minimum rent, percentage rent, real estate taxes and common area maintenance are classified separately under franchise sublease income on the consolidated statements of comprehensive income. Franchise sublease expenses which include minimum rent, percentage rent, real estate taxes and common area maintenance are classified separately under occupancy and other – franchise subleases on the consolidated statements of comprehensive income. Total franchise sublease income and franchise sublease expense for the Company comprise the following (in thousands):



	52 Weeks Ended			52 Weeks Ended			53 Weeks Ended
	January 1, 2019			January 2, 2018			January 3, 2017
Franchise sublease income	$	(3,115	)	$	(2,844	)	$	(2,343	)
Franchise sublease expense	2,855			2,608			2,207

Sublease rent income includes contingent rentals based on sales totaling $0.1 million during each of the fifty-two weeks ended January 1, 2019, the fifty-two weeks ended January 2, 2018 and the fifty-three weeks ended January 3, 2017.

Total rent expense for the Company for all non-cancelable operating leases comprise the following (in thousands):



	52 Weeks Ended			52 Weeks Ended			53 Weeks Ended
	January 1, 2019			January 2, 2018			January 3, 2017
Minimum rental expense	$	29,134		$	27,372		$	26,465
Favorable and unfavorable lease assets and liabilities amortization, net	(767		)	(809		)	(607		)
Straight-line rent expense	722			826			781
Contingent rent expense	715			685			805
	$	29,804		$	28,074		$	27,444

As of January 1, 2019, the Company is obligated under various capital leases having interest rates that average approximately 10%.

Minimum rental commitments and sublease minimum rental receipts as of January 1, 2019, under capital and operating leases having an initial non-cancelable term of one year or more are shown in the following table (in thousands):



	Rental Payments					Rental Receipts
	Capital Lease and Deemed Landlord Financing Liabilities			Operating Leases		Operating Subleases			Net Lease Commitments
2019	$	3,561		$	33,951	$	(2,564	)	$	34,948
2020	3,317			32,071		(2,403		)	32,985
2021	3,186			30,794		(2,409		)	31,571
2022	3,056			29,362		(2,392		)	30,026
2023	3,123			26,414		(2,274		)	27,263
Thereafter	34,071			153,675		(16,844		)	170,902
Total minimum lease payments	$	50,314		$	306,267	$	(28,886	)	$	327,695
Imputed interest	(29,003		)
Present value of payments	$	21,311

The Company has subleased 26 properties to other third parties where the Company remains primarily liable to the landlord for the performance of all obligations in the event that the sub-lessee does not perform its obligations under the lease. As a result of the sublease arrangements, future minimum rental commitments under operating leases will be offset by sublease amounts to be paid by the sub-lessee. The total of minimum sublease amounts to be received in the future under non-cancelable subleases is $28.9 million as of January 1, 2019.

One Del Taco franchisee has a direct sublease with a third party and Del Taco is a guarantor on the sublease which has a 13 year term expiring in 2031 and lease payments totaling approximately $1.8 million. The Company would remain a guarantor of the lease in the event the lease is extended for any established renewal periods. At this time, the Company does not anticipate any material defaults under the foregoing lease; therefore, no liability has been provided.

The amounts in operating lease and operating subleases in the table above include amounts for restaurant operating leases related to 11 of the 12 restaurants closed in the fourth fiscal quarter of 2015 (one such lease was terminated) and related subleases both of which have been included in our restaurant closure liability on our consolidated balance sheets as of January 1, 2019 on a present value basis.

During Fiscal 2017, the Company entered into two sale leaseback arrangements with third party private investors. These sale-leaseback transactions do not provide for any continuing involvement by the Company other than normal leases where the Company intends to use the property during the lease term. The leases have been accounted for as operating leases. The net proceeds from the transactions totaled approximately $9.9 million. Under one of the arrangements, the Company sold the land and building of an existing restaurant and leased it back for a term of 20 years. Under the other arrangement, the Company sold the land and building of a recently constructed restaurant and leased it back for a term of 20 years. The sale of these properties resulted in a loss of $0.3 million which is included in loss on disposal of assets, net in the consolidated statements of comprehensive income.

During Fiscal 2016, the Company entered into two sale-leaseback arrangements with third party private investors. These sale-leaseback transactions do not provide for any continuing involvement by the Company other than normal leases where the Company intends to use the properties during the lease terms. The leases have been accounted for as operating leases. The net proceeds from these transactions were $3.4 million. Under one of the arrangements, the Company sold the land and building of an existing restaurant and leased it back for a term of one year with the option to terminate with 60 days notice. Under the other arrangement, the Company sold the land and building of an acquired franchise-operated restaurant (see Note 5) and leased it back for a term of 20 years. The sale of these properties resulted in an immaterial loss which is included in loss on disposal of assets, net in the consolidated statements of comprehensive income.