Commitments and Contingencies

6 Months Ended

Jun. 29, 2013

Commitments and Contingencies

Commitments and Contingencies

7. Commitments and Contingencies

Contractual

Our future contractual obligations consist principally of long-term debt, operating leases, minimum commitments regarding third party warehouse operations services, forward purchase agreements and remaining minimum royalty payments due licensors pursuant to brand licensing agreements.

In order to mitigate the risks of volatility in commodity markets to which we are exposed, we have entered into forward purchase agreements with certain suppliers based on market prices, forward price projections and expected usage levels.  Our purchase commitments for certain ingredients, packaging materials and energy are generally less than 12 months.

Legal Proceedings

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 any such lawsuits, individually and in the aggregate, will not have a material adverse effect on our financial position or results of operations.

In March 2012, we learned that the Jamba Juice Company was named as a defendant in a putative class action filed in the Federal Court for the North District of California and captioned Kevin Anderson v. Jamba Juice Company which claims that the use of the words “all natural” to describe the Smoothie Kits is misleading and deceptive to consumers and violates various California consumer protection statutes and unfair competition statutes.  The suit is one of several “all natural” lawsuits recently brought against various food manufacturers and distributors in California.  In an amended complaint the plaintiff also alleged violations of the federal Magnuson-Moss Warranty Act, but the court dismissed those claims in a ruling issued in August 2012.  In a second amended complaint filed in September 2012, we were added as a defendant.  Under our license agreement with the Jamba Juice Company, we are obligated and have agreed to indemnify and defend Jamba Juice in the suit, and Jamba has tendered defense of the claim to us.  While we currently believe the “all natural” claims on the Smoothie Kits are not misleading and in full compliance with FDA guidelines, we are investigating the claims asserted in the action, and intend to vigorously defend against them.  The plaintiff filed a motion on July 15, 2013 seeking to certify a class of all persons in California who bought certain of the Jamba Juice Smoothie Kits.  Our opposition to the motion is due on September 30, 2013, and the court has scheduled a hearing on the motion on December 5, 2013.  On June 28, 2013, two new plaintiffs filed a separate class action complaint against Jamba Juice Company and Inventure Foods captioned Lily v. Jamba Juice Company in the same court, using the same plaintiff’s counsel and making nearly identical allegations as in the prior Anderson case.  On July 15, 2013, the plaintiff in Anderson filed a motion to consolidate the Lily case with Anderson.  Our response to the motion to consolidate is due on July 29, 2013 and our response to the Lilly complaint is due September 16, 2013.