Commitments and Contingencies:

12 Months Ended

Dec. 29, 2012

Commitments and Contingencies:

Commitments and Contingencies:

7. Commitments and Contingencies:

We are periodically a party to various lawsuits arising in the ordinary course of business.  Management believes, based on discussions with legal counsel, that the resolution of such lawsuits, individually and in the aggregate, will not have a material adverse effect on our financial position or results of operations.  See Note 11, “Litigation”.

We lease one-half of a 200,000 square foot facility in Bluffton, Indiana which is used as a distribution center.  This operating lease expires January 31, 2014 and current lease payments are approximately $32,500 per month.

We also lease approximately 13,865 square feet of office space in Phoenix, Arizona, which is used as our corporate headquarters.  The lease expires April 1, 2017 and current lease payments are approximately $26,000 per month.

We own a farming, processing and storage facility located on 696 acres of land in Lynden, Washington, which is leased from the Uptrails Group LLC, owned by three members of the Rader family.  One of the three, Brad Rader, is a current employee of ours and one of the others, Sue Rader, was a former owner of Rader Farms.  This operating lease commenced on the acquisition date and was extended in October 2012 through May 17, 2027.  Lease payments are $43,500 per month through May 17, 2017, at which time they increase to $52,200 for the duration of the term of the lease.

In addition to our facility and land leases, we have entered into a variety of operating leases for equipment, vehicles and office space.  Rental expense under all operating leases was $1.6 million and $1.7 million for fiscal 2012 and 2011, respectively.  Minimum future rental commitments under non-cancelable leases as of December 29, 2012 are as follows:

Year	Operating Leases
2013	$	1,468,439
2014	1,048,681
2015	1,001,099
2016	930,400
2017	775,500
Thereafter	6,390,630
Total	$	11,614,749

We produce T.G.I. Friday’s® brand snacks, Tato Skins® brand potato crisps and Boulder CanyonTM Natural Foods  Rice and Bean snacks utilizing a sheeting and frying process that includes technology that we license from a third party.  Pursuant to the license agreement between us and the third party, we have a royalty-bearing, exclusive right license to use the technology in the United States, Canada, and Mexico until such time the parties mutually agree to terminate the agreement.  Even though the patents for this technology expired in December 2006, in consideration for the use of this technology, we are required to make royalty payments on sales of products manufactured utilizing the technology until such termination date.  However, should products substantially similar to Tato Skins®, O’Boisies® and Pizzarias® become available for any reason in the marketplace by any manufacturer other than us which results in a sales decline of 10% or more, any royalty obligation for the respective product(s) shall cease.

We license the T.G.I. Friday’s® brand snacks trademark from T.G.I. Friday’s Inc. under a license agreement with a term expiring in May 2014.  Pursuant to the license agreement, we are required to make royalty payments on sales of T.G.I. Friday’s® brand snack products and are required to achieve certain minimum sales levels by certain dates during the contract term.

We license the Jamba® brand trademark from Jamba Juice Company under a license agreement with a term expiring in 2035.  Pursuant to the license agreement, we are required to make royalty payments on sales of Jamba® products, and are required to achieve certain minimum sales levels by certain dates during the contract term.

We license the Nathan’s Famous® brand trademark from Nathan’s Famous Corporation under a license agreement with a term expiring in 2031.  Pursuant to the license agreement, we are required to make royalty payments on sales of Nathan’s Famous® products, and are required to achieve certain minimum sales levels by certain dates during the contract term.

We license the Vidalia® brand trademark from Vidalia Brands, Inc. under a license agreement with a an initial term expiring January 2014, which automatically extends for a five year period upon meeting certain minimum sales targets.  Pursuant to the license agreement, we are required to make royalty payments on sales of Vidalia® brand products during the contract term.