Basis of Presentation

9 Months Ended

Oct. 02, 2011

A.	BASIS OF PRESENTATION

O'Charley's Inc. (the "Company") operates 221 (at October 2, 2011) full-service restaurant facilities in 17 states in the East, Southeast and Midwest under the trade name "O'Charley's," 106 full-service restaurant facilities in seven states throughout New England and upstate New York under the trade name "Ninety Nine Restaurants," and 10 full-service restaurant facilities in six states in the Southeast and Midwest under the trade name "Stoney River Legendary Steaks." As of October 2, 2011, the Company had six franchised O'Charley's restaurants in four states.

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial reporting and in accordance with Rule 10-01 of Regulation S-X. The Company's fiscal year ends on the last Sunday in December with its first quarter consisting of sixteen weeks and its second, third and fourth quarters consisting of twelve weeks each in most years.

In the opinion of management, the unaudited interim consolidated financial statements contained in this report reflect all adjustments, consisting primarily of normal recurring accruals, which are necessary for a fair presentation of the consolidated financial position and the results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year.

The Company's significant interim accounting policies include the recognition of certain advertising and marketing costs, generally in proportion to revenue.

These unaudited interim consolidated financial statements and footnote disclosures should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 26, 2010. Management of the Company has made certain estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues and expenses during the period to prepare these unaudited interim consolidated financial statements in conformity with GAAP.