NOTE 7 –

CLOSURES AND IMPAIRMENTS EXPENSE

Closures and impairments expense includes the following for the 13 and 26 weeks ended December 1, 2015 and December 2, 2014 (in thousands):

	Thirteen weeks ended						Twenty-six weeks ended
	December 1, 2015			December 2, 2014			December 1, 2015			December 2, 2014
Closures and impairments from continuing operations:
Property impairments	$	6,215		$	1,216		$	8,792		$	2,272
Closed restaurant lease reserves		3,721			295			4,325			761
Other closing costs		498			395			619			628
Gain on sale of surplus properties		(361	)		(831	)		(951	)		(1,104	)
Closures and impairments, net	$	10,073		$	1,075		$	12,785		$	2,557

As previously discussed in Note 5 to the Condensed Consolidated Financial Statements, during the 13 weeks ended December 1, 2015, we entered into an agreement to sell eight Company-owned Lime Fresh restaurants in Florida for approximately $6.3 million, which we expect to complete over the remainder of fiscal year 2016, and closed the remaining 11 Company-owned Lime Fresh restaurants. Included within closures and impairments, net for the 13 weeks ended December 1, 2015 are $7.6 million of impairments, lease reserves, and other charges relating to the closed Lime Fresh restaurants. Further information regarding closures and impairments expense for the Lime Fresh concept for all periods presented is contained in Note 11 to the Condensed Consolidated Financial Statements.

In connection with the planned sale of eight Company-owned Lime Fresh restaurants and the closing of the remaining 11 Company-owned Lime Fresh restaurants as discussed above, during the 13 weeks ended December 1, 2015, we recorded a $2.0 million trademark impairment charge representing a partial impairment of the Lime Fresh trademark. The Lime Fresh trademark has a net book value of $0.9 million remaining at December 1, 2015.

A rollforward of our reserve for future lease obligations associated with closed properties is as follows (in thousands):

	Reserve for Lease Obligations
Balance at June 2, 2015	$	7,051
Closing expense including rent and other lease charges		4,325
Payments		(1,631	)
Other adjustments		136
Balance at December 1, 2015	$	9,881

The amounts comprising future lease obligations in the table above are estimated using certain assumptions, including the period of time it will take to settle the lease with the landlord or find a suitable sublease tenant, and the amount of actual future cash payments could differ from our recorded lease obligations. Of the total future lease obligations included in the table above, $9.8 million and $7.0 million are included within the Accrued liabilities – Rent and other caption in our Condensed Consolidated Balance Sheets as of December 1, 2015 and June 2, 2015, respectively. For the remainder of fiscal year 2016 and beyond, we expect that our focus will be on obtaining settlements, or subleases as necessary, on as many of these leases as possible and these settlements could be higher or lower than the amounts recorded. The actual amount of any cash payments made by the Company for lease contract termination costs will be dependent upon ongoing negotiations with the landlords of the leased restaurant properties.