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Reportable Segments
 9 Months Ended
Jun. 01, 2016
Segment Reporting [Abstract]  
Reportable Segments
Reportable Segments
 
The Company has three reportable segments: Company-owned restaurants, Culinary Contract Services (“CCS”) and Franchise Operations.
 
Company-owned restaurants
 
Company-owned restaurants consists of several brands which are aggregated into one reportable segment because the nature of the products and services, the production processes, the customers, the methods used to distribute the products and services, the nature of the regulatory environment and store level profit margin are similar. The chief operating decision maker analyzes Company-owned restaurants at store level profit which is revenue less cost of food, payroll and related costs, other operating expenses and occupancy costs. The primary brands are Luby’s Cafeterias, Fuddruckers and Cheeseburger in Paradise, with a non-core restaurant location operating under the brand name Bob Luby’s Seafood Grill. All company-owned restaurants are casual dining restaurants. Each restaurant is an operating segment because operating results and cash flow can be determined for each restaurant.
 
The total number of Company-owned restaurants was 178 at June 1, 2016 and 177 at August 26, 2015.

Culinary Contract Services
 
CCS, branded as Luby’s Culinary Contract Services, consists of a business line servicing healthcare, higher education and corporate dining clients. The healthcare accounts are full service and typically include in-room delivery, catering, vending, coffee service and retail dining. CCS has contracts with long-term acute care hospitals, acute care medical centers, ambulatory surgical centers, behavioral hospitals and business and industry clients. CCS has the unique ability to deliver quality services that include facility design and procurement as well as nutrition and branded food services to our clients. The cost of Culinary Contract Services on the Consolidated Statements of Operations include all food, payroll and related costs and other operating expenses related to CCS sales.
 
The total number of CCS contracts was 26 at June 1, 2016 and 23 at August 26, 2015.  
 
Franchise Operations
 
We offer franchises for only the Fuddruckers brand. Franchises are sold in markets where expansion is deemed advantageous to the development of the Fuddruckers concept and system of restaurants. Initial franchise agreements have a term of 20 years. Franchise agreements typically grant franchisees an exclusive territorial license to operate a single restaurant within a specified area, usually a four-mile radius surrounding the franchised restaurant.
 
Franchisees bear all direct costs involved in the development, construction and operation of their restaurants. In exchange for a franchise fee, the Company provides franchise assistance in the following areas: site selection, prototypical architectural plans, interior and exterior design and layout, training, marketing and sales techniques, assistance by a Fuddruckers “opening team” at the time a franchised restaurant opens, and operations and accounting guidelines set forth in various policies and procedures manuals.
 
All franchisees are required to operate their restaurants in accordance with Fuddruckers’ standards and specifications, including controls over menu items, food quality and preparation. The Company requires the successful completion of its training program by a minimum of three managers for each franchised restaurant. In addition, franchised restaurants are evaluated regularly by the Company for compliance with franchise agreements, including standards and specifications through the use of periodic, unannounced, on-site inspections and standard evaluation reports.
 
The number of franchised restaurants was 114 at June 1, 2016 and 106 at August 26, 2015.  
 
Licensee
 
In November 1997, a prior owner of the Fuddruckers – World’s Greatest Hamburgers ® brand granted to a licensee the exclusive right to use the Fuddruckers proprietary marks, trade dress and system to develop Fuddruckers restaurants in a territory consisting of certain countries in Africa, the Middle East and parts of Asia. As of July 2016, this licensee operated 35 restaurants that are licensed to use the Fuddruckers Proprietary Marks in Saudi Arabia, Egypt, Lebanon, United Arab Emirates, Qatar, Jordan, Bahrain, Kuwait, Morocco and Malaysia. The Company does not receive revenue or royalties from these restaurants.

The table on the following page shows segment financial information. The table also lists total assets for each reportable segment. Corporate assets include cash and cash equivalents, property and equipment, assets related to discontinued operations, property held for sale, deferred tax assets and prepaid expenses.
 
 
Quarter Ended
 
Three Quarters Ended
 
June 1,
2016
 
May 6,
2015
 
June 1,
2016
 
May 6,
2015
 
(12 weeks)
 
(12 weeks)
 
(40 weeks)
 
(36 weeks)
 
(In thousands)
Sales:
 
 
 
 
 
 
 
Company-owned restaurants (1)
$
86,619

 
$
88,900

 
$
286,773

 
$
255,187

Culinary contract services
3,892

 
3,624

 
12,726

 
11,993

Franchise operations
1,586

 
1,578

 
5,411

 
4,764

Total
$
92,097

 
$
94,102

 
$
304,910

 
$
271,944

Segment level profit:
 
 
 
 

 

Company-owned restaurants
$
13,013

 
$
14,609

 
$
42,540

 
$
35,354

Culinary contract services
358

 
392

 
1,250

 
1,184

Franchise operations
1,145

 
1,168

 
3,931

 
3,617

Total
$
14,516

 
$
16,169

 
$
47,721

 
$
40,155

Depreciation and amortization:
 
 
 
 

 

Company-owned restaurants
$
4,386

 
$
4,047

 
$
14,512

 
$
12,538

Culinary contract services
19

 
28

 
83

 
127

Franchise operations
192

 
177

 
641

 
531

Corporate
707

 
507

 
2,302

 
1,412

Total
$
5,304

 
$
4,759

 
$
17,538

 
$
14,608

Capital expenditures:
 
 
 
 

 

Company-owned restaurants
$
3,217

 
$
5,023

 
$
13,839

 
$
15,368

Culinary contract services
—

 
—

 
—

 
—

Franchise operations
—

 
—

 
—

 
—

Corporate
171

 
418

 
519

 
1,061

Total
$
3,388

 
$
5,441

 
$
14,358

 
$
16,429

 
 
 
 
 

 

Loss before income taxes and discontinued operations:
 
 
 
 

 

Segment level profit
$
14,516

 
$
16,169

 
$
47,721

 
$
40,155

Opening costs
(117
)
 
(427
)
 
(688
)
 
(2,022
)
Depreciation and amortization
(5,304
)
 
(4,759
)
 
(17,538
)
 
(14,608
)
Selling, general and administrative expenses
(9,227
)
 
(8,139
)
 
(32,312
)
 
(26,671
)
Provision for asset impairments
(172
)
 
—

 
(209
)
 
(218
)
Net loss (gain) on disposition of property and equipment
(42
)
 
609

 
793

 
1,696

Interest income
—

 
1

 
3

 
3

Interest expense
(482
)
 
(599
)
 
(1,674
)
 
(1,624
)
Other income (expense), net
88

 
24

 
(2
)
 
282

Income (loss) before income taxes and discontinued operations
$
(740
)
 
$
2,879

 
$
(3,906
)
 
$
(3,007
)

 
 
June 1,
2016
 
August 26,
2015
Total assets:
 
 
 
Company-owned restaurants(2)
$
213,995

 
$
218,492

Culinary contract services
3,560

 
1,644

Franchise operations(3)
12,538

 
13,034

Corporate
31,679

 
31,088

Total
$
261,772

 
$
264,258

 
(1)
Includes vending revenue of $143 and $112 thousand for the quarters ended June 1, 2016 and May 6, 2015, respectively, and $437 and $355 thousand for the three quarters ended June 1, 2016 and May 6, 2015, respectively.
(2)
Company-owned restaurants segment includes $10.0 million of Fuddruckers trade name, Cheeseburger in Paradise liquor licenses, and Jimmy Buffett intangibles.
(3)
Franchise operations segment includes approximately $11.7 million in royalty intangibles.