Commitments and License Rights

12 Months Ended

Dec. 27, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and License Rights

10. Commitments and License Rights

Lease Commitments - The Company leases real estate under various noncancellable operating leases with an initial term greater than one year that contain multiple renewal options, exercisable at the Company’s option. The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty. Percentage rentals are based on the revenues at the specific rented property. Rental payments on capital leases are not recorded in rent expense but are recorded as a reduction of the capital lease obligation and interest expense (see Note 6). Rent expense charged to operations under operating leases was as follows:

	Year Ended
	December 27, 2018			December 28, 2017			December 29, 2016
	(in thousands)
Fixed minimum rentals	$	10,681		$	12,027		$	7,707
Amortization of favorable lease right		334			334			334
Percentage rentals		1,188			708			343
Amortization of unfavorable leases		(936	)		(1,200	)		–
	$	11,267		$	11,869		$	8,384

Aggregate minimum rental commitments under long-term operating leases, assuming the exercise of certain lease options, are as follows at December 27, 2018:

Fiscal Year	(in thousands)
2019	$	11,317
2020		10,169
2021		9,670
2022		9,910
2023		9,038
Thereafter		80,523
	$	130,627

Subsequent to December 27, 2018, the Company acquired 22 operating leases in conjunction with the Movie Tavern acquisition, with lease terms ranging from 3 to 20 years.

Commitments - The Company has commitments for the completion of construction at various properties totaling approximately $24,757,000 at December 27, 2018.

License Rights – As of December 27, 2018, the Company had license rights to operate three hotels using the Hilton trademark, two hotels using the Marriott trademark and one hotel using the InterContinental trademark. Under the terms of the licenses, the Company is obligated to pay fees based on defined gross sales. Subsequent to year-end, the Company ceased using the InterContinental trademark.