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Leases
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Dec. 30, 2012
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| Leases |
8. LEASES The Company leases land and buildings for its corporate office and all of its restaurants under various long-term operating lease agreements. The initial lease terms range from 10 years to 20 years and currently expire between 2016 and 2032. The leases include renewal options for 5 to 20 additional years. Some of the leases provide for base rent, plus additional rent based on gross sales, as defined in each lease agreement. The Company is also generally obligated to pay certain real estate taxes, insurance and common area maintenance (“CAM”) charges, and various other expenses related to properties. Rent expense is paid to various landlords including several companies owned and controlled by certain of the Company’s minority stockholders.
At December 30, 2012, the future minimum rental commitments under non-cancellable operating leases, for opened restaurants and those under development, including option periods that are reasonably assured of renewal are as follows:
Additionally, the Company has entered in to one lease agreement related to the development of a future restaurant subsequent to December 30, 2012. The Company’s aggregate future commitment relating to this lease is $3.5 million. The above future minimum rental amounts exclude the amortization of deferred lease incentives, renewal options that are not reasonably assured of renewal, and contingent rent based on sales or increases in the Consumer Price Index. The Company generally has escalating rents over the term of the leases and records rent expense on a straight-line basis. Rent expense, excluding real estate taxes, CAM charges, insurance, deferred lease incentives and other expenses related to operating leases for the years ended December 30, 2012, December 25, 2011 and December 26, 2010 consists of the following:
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