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Note R - Leases

9 Months Ended

Dec. 27, 2020

NOTE R – LEASES

The Company is party as lessee to various leases for its Company-operated restaurants and lessee/sublessor to one franchised location property, including land and buildings, as well as leases for its corporate office and certain office equipment.

Company as lessee

The components of the net lease cost for the thirteen and thirty-nine week periods ended December 27, 2020 and December 29, 2019 were as follows (in thousands):

	Thirteen weeks ended						Thirty-nine weeks ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Statement of Earnings
Operating lease cost	$	370		$	339		$	1,181		$	899
Short term lease cost		-			4			-			14
Variable lease cost		292			280			1,007			1,240
Less: Sublease income, net		(9	)		(22	)		(31	)		(63	)

Total net lease cost (a)	$	653		$	601		$	2,157		$	2,090

(a)

The thirteen and thirty-nine week periods ended December 27, 2020 and December 29, 2019 include $502,000, net and $1,696,000, net and $470,000, net and $1,679,000, net, respectively, recorded to “Restaurant Operating Expenses” for leases for Company-operated restaurants; $160,000 and $492,000, and $153,000 and $474,000, respectively, recorded to “General and administrative expenses” for leases for corporate offices and equipment; and $9,000 and $31,000, and $22,000 and $63,000, respectively, recorded to “Other income, net” for leased properties that are leased to franchisees.

Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):

	Thirteen weeks ended				Thirty-nine weeks ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019

Operating cash flows from operating leases	$	153	$	60	$	560	$	351

The weighted average remaining lease term and weighted-average discount rate for operating leases as of December 27, 2020 were as follows:

Weighted average remaining lease term (years):
Operating leases	7.4

Weighted average discount rate:
Operating leases	8.877	%

Future lease commitments to be paid and received by the Company as of December 27, 2020 were as follows (in thousands):

	Payments		Receipts
	Operating Leases		Subleases		Net Leases

Fiscal year:
2021 (a)	$	377	$	38	$	339
2022		1,837		247		1,590
2023		1,849		168		1,681
2024		1,774		169		1,605
2025		1,678		169		1,509
Thereafter		5,474		352		5,122
Total lease commitments	$	12,989	$	1,143	$	11,846
Less: Amount representing interest		3,434
Present value of lease liabilities (b)	$	9,555

(a)

Represents future lease commitments to be paid and received by the Company for the remainder of the 2021 fiscal year. Amount does not include $956,000 of lease commitments paid and received by the Company for the thirty-nine week period ended December 27, 2020.

(b)

The present value of minimum operating lease payments of $1,833,000 and $7,722,000 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively.

Company as lessor

The components of lease income for the thirteen and thirty-nine week periods ended December 27, 2020 and December 29, 2019 were as follows (in thousands):

	Thirteen weeks ended				Thirty-nine weeks ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019

Operating lease income, net	$	9	$	22	$	31	$	63