Commitments And Contingencies

9 Months Ended

Oct. 02, 2011

Commitments And Contingencies [Abstract]

Commitments And Contingencies

Note D – Commitments and Contingencies

            As a result of the disposition of its Wendy's operations in 1996, the Company remains secondarily liable for certain real property leases with remaining terms of one to five years.  The total estimated maximum amount of lease payments remaining on these ten leases as of October 2, 2011, was approximately $1,300,000.  Also, in connection with the sale of its Mrs. Winner's Chicken & Biscuit restaurant operations in 1989 and certain previous dispositions, the Company remains secondarily liable for certain real property leases with remaining terms of one to three years.  The total estimated maximum amount of lease payments remaining on these 12 leases as of October 2, 2011, was approximately $700,000.  Additionally, in connection with the previous disposition of certain other Wendy's restaurant operations, primarily the southern California restaurants in 1982, the Company remains secondarily liable for real property leases with remaining terms of one to four years.  The total estimated maximum amount of lease payments remaining on these four leases as of October 2, 2011, was approximately $500,000.

The Company is the subject of a lawsuit, Dionne Michelle Williams-Green v. J. Alexander's Restaurants, Inc., pending in the United States District Court for the Northern District of Illinois. The plaintiff is a former hourly employee of the Company in Illinois who seeks to represent a class of other hourly employees who worked for the Company in Illinois. The complaint alleges that the Company operated an invalid tip share pool and failed to pay overtime and off-the-clock wages to certain Illinois employees in violation of Illinois law. Plaintiff seeks monetary damages on behalf of herself and the class.

In September 2011, the court granted the Company's motion for summary judgment dismissing plaintiff's claims for failure to pay overtime and off-the-clock wages, but denied the Company's motion for summary judgment on plaintiff's claim that it operated an invalid tip share pool. The court also certified a class of all persons who worked for the Company in Illinois as hourly employees at any time since August 16, 2002, and who participated in one or more tip pools. In October 2011, the Company's request for permission to appeal the court's order granting class certification was denied.

The Company believes it has meritorious defenses to plaintiff's claims, and it intends to vigorously defend the lawsuit. While the potential financial impact of this case is not determinable at this time, the Company expects that it may incur significant expense in defending the claim associated with this litigation. There can be no assurance, however, that the Company will be successful in defending the claim. An adverse resolution of the lawsuit could have a material adverse effect on the Company's consolidated financial position and results of operations in the period in which the lawsuit is resolved. No accrual for this contingency has been made in the Company's condensed consolidated financial statements.

As described in Note C, the Company is currently undergoing a federal employment tax audit for 2009 and 2010. The potential financial impact of this audit is not determinable at this time.

In addition to the matters described above, the Company is from time to time subject to routine litigation and claims incidental to its business, including actions with respect to federal and state tax matters, labor-related claims and other matters. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. However, management believes that, based on current knowledge, the final outcome of these other matters will not have a material adverse effect on the Company's financial condition, operating results or liquidity. Regardless of the outcome, legal proceedings can have an adverse effect on the Company because of defense costs, diversion of management resources and other factors.