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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Sep. 29, 2012
Commitments and Contingencies Disclosure [Text Block]

 

 

10.

COMMITMENTS AND CONTINGENCIES

 

 

 

Leases The Company leases its restaurants, bar facilities, and administrative headquarters through its subsidiaries under terms expiring at various dates through 2032. Most of the leases provide for the payment of base rents plus real estate taxes, insurance and other expenses and, in certain instances, for the payment of a percentage of the restaurants’ sales in excess of stipulated amounts at such facility and in one instance based on profits.

 

 

 

In February 2010, we entered into an amendment to the lease for the food court space at the New York-New York Hotel and Casino in Las Vegas, Nevada. Pursuant to this amendment, we agreed to, among other things; commit no less than $3,000,000 to remodel the food court. In exchange for this commitment, the landlord agreed to extend the food court lease for an additional four years. As of September 29, 2012, the Company has spent approximately $2,150,000 related to this commitment.

 

 

 

As of October 1, 2011, future minimum lease payments under noncancelable leases are as follows:


 

 

 

 

 

 

 

Amount

 

 

 

 

 

Fiscal Year

 

(In thousands)

 

 

 

 

 

 

2013

 

$

8,379

 

2014

 

 

8,049

 

2015

 

 

7,383

 

2016

 

 

6,816

 

2017

 

 

5,571

 

Thereafter

 

 

30,673

 

 

 

   

 

 

 

 

 

 

Total minimum payments

 

$

66,871

 

 

 

   

 


 

 

 

In connection with certain of the leases included in the table above, the Company obtained and delivered irrevocable letters of credit in the aggregate amount of $419,000 as security deposits under such leases.

 

 

 

Rent expense from continuing operations was approximately $14,619,000 and $14,856,000 for the fiscal years ended September 29, 2012 and October 1, 2011, respectively. Contingent rentals, included in rent expense, were approximately $5,055,000 and $4,968,000 for the fiscal years ended September 29, 2012 and October 1, 2011, respectively.

 

 

 

Legal Proceedings — In the ordinary course its business, the Company is a party to various lawsuits arising from accidents at its restaurants and worker’s compensation claims, which are generally handled by the Company’s insurance carriers. The employment by the Company of management personnel, waiters, waitresses and kitchen staff at a number of different restaurants has resulted in the institution, from time to time, of litigation alleging violation by the Company of employment discrimination laws. Management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

 

 

 

Other — On June 7, 2011, the Company entered into a 10-year exclusive agreement to manage a yet to be constructed restaurant and catering service at Basketball City in New York City in exchange for a fee of $1,000,000 (all of which has been paid as of September 29, 2012 and is included in Intangible Assets in the accompanying Consolidated Balance Sheet). Under the terms of the agreement the owner of the property will construct the facility at their expense and the Company will pay the owner an annual fee based on sales, as defined in the agreement. The Company expects to begin operating this property within the next 12 months.