NOTE 7 – CLOSURES AND IMPAIRMENTS EXPENSE

Closures and impairments expense includes the following for the 13 and 39 weeks ended March 1, 2016 and March 3, 2015 (in thousands):

	Thirteen weeks ended						Thirty-nine weeks ended
	March 1, 2016			March 3, 2015			March 1, 2016			March 3, 2015
Closures and impairments from continuing operations:
Property impairments	$	6,938		$	3,578		$	15,730		$	5,850
Closed restaurant lease reserves		(1,207	)		380			3,118			1,141
Other closing costs		471			277			1,090			905
Gain on sale of surplus properties		(79	)		(244	)		(1,030	)		(1,348	)
Closures and impairments, net	$	6,123		$	3,991		$	18,908		$	6,548

As previously discussed in Note 5 to the Condensed Consolidated Financial Statements, during the second quarter of fiscal year 2016, we entered into an agreement to sell eight Company-owned Lime Fresh restaurants in Florida for approximately $6.3 million, which we expect to complete over the remainder of fiscal year 2016, and closed the remaining 11 Company-owned Lime Fresh restaurants. Included within closures and impairments, net for the 39 weeks ended March 1, 2016 are $6.4 million of impairments, lease reserves, and other charges relating to the closed Lime Fresh restaurants. Further information regarding closures and impairments expense for the Lime Fresh concept for all periods presented is contained in Note 11 to the Condensed Consolidated Financial Statements.

In connection with the planned sale of eight Company-owned Lime Fresh restaurants and the closing of the remaining 11 Company-owned Lime Fresh restaurants as discussed above, during the second quarter of fiscal year 2016, we recorded a $2.0 million trademark impairment charge representing a partial impairment of the Lime Fresh trademark. The Lime Fresh trademark has a net book value of $0.9 million remaining at March 1, 2016.

A rollforward of our reserve for future lease obligations associated with closed properties is as follows (in thousands):

	Reserve for Lease Obligations
Balance at June 2, 2015	$	7,051
Closing expense including rent and other lease charges		3,118
Payments		(5,252	)
Other adjustments		830
Balance at March 1, 2016	$	5,747

The amounts comprising future lease obligations in the table above are estimated using certain assumptions, including the period of time it will take to settle the lease with the landlord or find a suitable sublease tenant, and the amount of actual future cash payments could differ from our recorded lease obligations. Of the total future lease obligations included in the table above, $5.7 million and $7.0 million are included within the Accrued liabilities – Rent and other caption in our Condensed Consolidated Balance Sheets as of March 1, 2016 and June 2, 2015, respectively. For the remainder of fiscal year 2016 and beyond, we expect that our focus will be on obtaining settlements, or subleases as necessary, on as many of these leases as possible and these settlements could be higher or lower than the amounts recorded. The actual amount of any cash payments made by the Company for lease contract termination costs will be dependent upon ongoing negotiations with the landlords of the leased restaurant properties.