Chuy's Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Leases

Leases

12 Months Ended

Dec. 31, 2017

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 15 years and currently expire between 2019 and 2039. The leases typically include renewal options for 10 to 15 years, which are exercisable at the Company's option. 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 the Company’s founders and one of its executive officers. In 2017, we also subleased additional office space from certain related parties to expand our corporate headquarters.

Future minimum lease payments under noncancelable operating leases include renewal option periods for certain leases when such option periods are included for purposes of calculating straight line rents. At December 31, 2017, future minimum rentals for each of the next five years and in total are as follows:



	Unrelated Parties		Related Party		Total
Fiscal year ending:
2018	$	21,520	$	2,314	$	23,834
2019	22,845		1,670		24,515
2020	22,970		1,401		24,371
2021	23,314		1,413		24,727
2022	23,345		393		23,738
Thereafter	281,830		1,676		283,506
Total minimum lease payments	$	395,824	$	8,867	$	404,691

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. 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 31, 2017, December 25, 2016 and December 27, 2015 consists of the following:



	2017		2016		2015
Minimum rent—related parties	$	2,215	$	1,988	$	1,901
Contingent rent—related parties	621		663		646
Total rent—related parties	2,836		2,651		2,547
Minimum rent—unrelated parties	18,304		15,419		12,401
Contingent rent—unrelated parties	397		312		355
Total rent—unrelated parties	18,701		15,731		12,756
Total minimum and contingent rent	$	21,537	$	18,382	$	15,303