LEASED PROPERTY

Although it is the Company’s policy to own the property on which it operates restaurants, the Company occupies some of its restaurant facilities pursuant to lease agreements. As of September 18, 2012, the Company operated 14 Frisch's Big Boy restaurants on non-owned premises, 13 of which were classified as operating leases and one was a capital lease. Most of the operating leases have multiple renewal options, four of which will expire at various times over the next five years. While none of the four leases has a purchase option, all four have renewal options available. In addition, an operating lease was put into place in September 2012 for land on which construction of a Frisch's Big Boy restaurant was in progress as of September 18, 2012.

The Company remains contingently liable under certain operating lease agreements relating to land on which seven of the Company's former Golden Corral restaurants are situated (see Other Contingencies in NOTE H — COMMITMENTS AND CONTINGENCIES).

Office space is occupied under an operating lease that expires during fiscal year 2023, at which time a purchase option becomes available to acquire the office property in fee simple title.

Rent expense under operating leases:



	16 weeks ended
	September 18, 2012		September 20, 2011
	(in thousands)
Minimum rentals (a)	$	326	$	377
Contingent payments	—		—
	$	326	$	377

(a) The 16 weeks ended September 20, 2011 does not include $186,000 for Golden Corral recorded in discontinued operations.

The ground lease for the Frisch's Big Boy restaurant that is classified as a capital lease requires the Company to purchase the land in fee simple title between the 10th (2020) and 15th (2025) years of the lease. Delivery equipment is held under capitalized leases expiring during various periods extending into fiscal year 2021.

An analysis of the capitalized leased property is shown in the following table. Amortization of capitalized delivery and other equipment is based on the straight-line method over the primary terms of the leases.



	Asset balances at
	September 18, 2012			May 29, 2012
	(in thousands)
Restaurant property (land)	$	825		$	825
Delivery equipment	1,676			1,486
Less accumulated amortization	(731		)	(679		)
	$	1,770		$	1,632

Future minimum lease payments under capitalized leases and operating leases are summarized below. The column for capitalized leases includes the requirement to acquire the land described above in fee simple title.



Period ending September 18,	Capitalized Leases			Operating Leases
	(in thousands)
2013	$	276		$	1,053
2014	276			1,063
2015	276			887
2016	276			843
2017	212			855
2018 to 2033	1,266			9,833
Total	2,582			$	14,534
Amount representing interest	(753		)
Present value of obligations	1,829
Portion due within one-year	(169		)
Long-term obligations	$	1,660