Note 3 - Intangible Assets

12 Months Ended

Feb. 26, 2012

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

NOTE 3.  INTANGIBLE ASSETS

Intangible assets consisted of the following as of the indicated dates:

	Intangible Assets
	As of February 26, 2012					As of February 27, 2011
	Gross Carrying		Accumulated			Gross Carrying		Accumulated
	Amount		Amortization			Amount		Amortization
Franchise Agreements	$	2,106,000	$	(1,285,000	)	$	2,291,000	$	(1,385,000	)
Goodwill		10,418,000		(1,346,000	)		10,492,000		(1,354,000	)
Total	$	12,524,000	$	(2,631,000	)	$	12,783,000	$	(2,739,000	)

Goodwill and intangibles with indefinite lives are not subject to amortization, but are subject to assessment for impairment whenever there is an indication of impairment or, at least annually as of the Company’s fiscal year end by applying a fair value based test.  The Company has five reporting units for the purpose of evaluating goodwill impairment which are based on the geographic market areas of its restaurants.  These five reporting units are Youngstown, OH, Parkersburg/Wheeling, West Virginia, Pittsburgh, PA, St Louis, MO and Erie, PA.  The Company has performed the annual goodwill impairment tests during fiscal 2012 and 2011 and determined that the fair value of each reporting unit was greater than its carrying value at each date.  When a property is sold, the proportion that the sales proceeds of the property bears to the total fair value of the restaurants in the related market area is removed from the goodwill balance of that market.

The Company’s intangible asset amortization expense relating to its franchise agreements was $109,000 and $232,000 for fiscal 2012 and 2011, respectively.  The estimated intangible amortization expense for each of the next five years is $105,000 per year.

The decrease in franchise agreements in fiscal 2012 resulted from the expiration of three licenses and the write off of agreements for twelve closed restaurants slightly offset by $24,000 paid for three new agreements.  The $66,000 decrease in goodwill resulted from the sale of one property in the Pittsburgh market area.