Note M - Guaranty and Other Commitments and Contingencies

12 Months Ended

Mar. 27, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE M – GUARANTY AND OTHER COMMITMENTS AND CONTINGENCIES

1. Guaranty  

On February 27, 2017, a wholly-owned subsidiary of the Company executed a Guaranty of Lease (the “Brooklyn Guaranty”) in connection with its re-franchising of a restaurant located in Brooklyn, New York. The Company was obligated to make payments under the Brooklyn Guaranty in the event of a default by the tenant/franchisee. The Brooklyn Guaranty had an initial term of 10 years and one 5-year option and was limited to 24 months of rent for the first three years of the term. For the remainder of the term, the Brooklyn Guaranty was limited to 12 months of rent plus reasonable costs of collection and attorney’s fees.

The Company entered into a termination of lease agreement effective January 15, 2022, subsequently amended and restated effective March 29, 2022. As consideration for all outstanding amounts due and payable under the Brooklyn Guaranty, the Company agreed to pay a termination fee in the amount of $75, of which the Company agreed to pay 50% and the tenant/franchisee agreed to pay 50%. The Company paid its share of the termination fee in January 2022.

2. Legal Proceedings

The Company and its subsidiaries are from time to time involved in ordinary and routine litigation. Management presently believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, cash flows or results of operations. Nevertheless, litigation is subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling could include money damages and, in such event, could result in a material adverse impact on the Company’s results of operations for the period in which the ruling occurs.