Reportable Segments

12 Months Ended

Aug. 26, 2020

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

We have five reportable segments: Luby’s cafeterias, Fuddruckers restaurants, Cheeseburger in Paradise restaurants, Fuddruckers franchise operations, and Culinary contract services.

Company-owned restaurants

Company-owned restaurants consists of Luby’s Cafeterias, Fuddruckers and Cheeseburger in Paradise reportable segments. We consider each restaurant to be an operating segment because operating results and cash flow can be determined for each restaurant. We aggregate our operating segments into reportable segments by restaurant brand because the nature of the products and services, the production processes, the customers, the methods used to distribute the products and services, long-term store level profit margins, and the nature of the regulatory environment are similar. The chief operating decision maker analyzes store level profit which is defined as restaurant sales and vending revenue, less cost of food, payroll and related costs, other operating expenses and occupancy costs. All company-owned Luby’s Cafeterias, Fuddruckers and Cheeseburger in Paradise restaurants are casual dining restaurants.

The Luby’s segment includes the results of our company-owned Luby’s Cafeterias restaurants. The total number of Luby’s restaurants at the end of fiscal 2020 and 2019 were 61 and 79, respectively. Included in the count at the end of fiscal 2020 is five Combo units, where a Luby's cafeteria and a Fuddruckers restaurant occupy the same location.

The Fuddruckers segment includes the results of our company-owned Fuddruckers restaurants. The total number of Fuddruckers restaurants at the end of fiscal 2020 and 2019 were 24 and 44, respectively.

The Cheeseburger and Paradise segment includes the results of our Cheeseburger in Paradise restaurants. The total number of Cheeseburger in Paradise restaurants at the end of fiscal 2020 and 2019 were zero and one, respectively.

Culinary Contract Services

CCS, branded as Luby’s Culinary Services, consists of a business line servicing healthcare, sport stadiums, corporate dining clients, and sales through retail grocery stores. The healthcare accounts are full service and typically include in-room delivery, catering, vending, coffee service, and retail dining. CCS had contracts with long-term acute care hospitals, acute care medical centers, ambulatory surgical centers, retail grocery stores, behavioral hospitals, a senior living facility, sports stadiums, government, 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 our consolidated statements of operations includes all food, payroll and related costs, other operating expenses, and other direct general and administrative expenses related to CCS sales. The total number of CCS contracts at the end of fiscal 2020 and 2019 were 26 and 31, respectively.

CCS began selling Luby's famous Fried Fish, Macaroni & Cheese and Chicken Tetrazzini in February 2017, December 2016, and May, 2019, respectively, in the freezer section of H-E-B stores, a Texas-born retailer. H-E-B stores now stock the family-sized versions of Luby's Classic Macaroni and Cheese, Chicken Tetrazzini, and Luby's Fried Fish. HEB also stocks single serve versions of these three items as well as Jalapeno Macaroni and Cheese.

Fuddruckers Franchise Operations

We only offer franchises for 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 generally have a term of 20 years. Franchise agreements typically grant franchisees an exclusive territorial license to operate a single restaurant within a specified area.

Franchisees bear all direct costs involved in the development, construction, and operation of their restaurants. In exchange for a franchise fee, we provide 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 standards evaluation reports.

The number of franchised restaurants at the end of fiscal 2020 and 2019 were 71 and 102, respectively.

Segment Table

The tables below present financial information as required by ASC 280 for segment reporting. ASC 280 requires depreciation and amortization be disclosed for each reportable segment, even if not used by the chief operating decision maker. The table also lists total assets for each reportable segment. Corporate assets include cash and cash equivalents, restricted cash, property and equipment, assets related to discontinued operations, property held for sale, deferred tax assets, and prepaid expenses.

	Fiscal Year Ended
	August 26, 2020		August 28, 2019
	(In thousands)
Sales:
Luby's cafeterias	$	149,691	$	214,074
Fuddruckers restaurants(1)	32,428		67,710
Cheeseburger in Paradise restaurants	1,522		3,108
Culinary contract services	26,747		31,888
Fuddruckers franchise operations	3,634		6,690
Total	$	214,022	$	323,470
Segment level profit:
Luby's cafeterias	$	12,087	$	25,423
Fuddruckers restaurants	(2,196)		2,702
Cheeseburger in Paradise restaurants	(308)		(240)
Culinary contract services	2,529		3,334
Fuddruckers franchise operations	2,093		5,057
Total	$	14,205	$	36,276
Depreciation and amortization:
Luby's cafeterias	$	7,598	$	8,886
Fuddruckers restaurants	1,507		2,844
Cheeseburger in Paradise restaurants	77		117
Culinary contract services	34		82
Fuddruckers franchise operations	298		767
Corporate	2,000		1,302
Total	$	11,514	$	13,998
Total assets:
Luby's cafeterias	$	90,349	$	107,287
Fuddruckers restaurants (2)	26,502		25,725
Cheeseburger in Paradise restaurants (3)	164		829
Culinary contract services	4,744		6,703
Fuddruckers franchise operations (4)	8,973		10,034
Corporate	46,671		35,422
Total	$	177,403	$	186,000

(1) Includes vending revenue of $130 thousand and $379 thousand for the years ended August 26, 2020 and August 28, 2019, respectively. 

(2) Includes Fuddruckers trade name intangible of $6.9 million and $7.5 million at August 26, 2020 and August 28, 2019, respectively.

(3) Includes Cheeseburger in Paradise liquor licenses, and Jimmy Buffett intangibles of $34 thousand and $46 thousand at August 26, 2020 and August 28, 2019, respectively.

(4) Fuddruckers franchise operations segment includes royalty intangibles of $8.4 million and $9.2 million at August 26, 2020 and August 28, 2019, respectively.

	Fiscal Year Ended
	August 26, 2020		August 28, 2019
	(In thousands)
Capital expenditures:
Luby's cafeterias	$	1,841	$	3,195
Fuddruckers restaurants	148		513
Cheeseburger in Paradise restaurants	34		16
Fuddruckers franchise operations	9		—
Corporate	88		263
Total	$	2,120	$	3,987

	Fiscal Year Ended
	August 26, 2020		August 28, 2019
	(In thousands)
Loss before income taxes and discontinued operations:
Segment level profit	$	14,205	$	36,276
Opening costs	(14)		(56)
Depreciation and amortization	(11,514)		(13,998)
Selling, general and administrative expenses	(24,571)		(34,685)
Other charges	(3,401)		(3,764)
Net provision for asset impairments and restaurant closings	(10,193)		(5,603)
Net gain on disposition of property and equipment	11,557		12,832
Interest income	60		30
Interest expense	(6,388)		(5,977)
Other income, net	1,195		195
Total	$	(29,064)	$	(14,750)