Note Q - Commitments and Contingencies

9 Months Ended

Dec. 29, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE Q – COMMITMENTS AND CONTINGENCIES

1.

Commitments 

On

February 27, 2017,

a wholly-owned subsidiary of the Company executed a Guaranty of Lease (the “Brooklyn Guaranty”) in connection with its re-franchising of a restaurant located in Brooklyn, New York. The Company is obligated to make payments under the Brooklyn Guaranty in the event of a default by the tenant/franchisee. The Brooklyn Guaranty has an initial term of

10

years and

one

5

-year option and is limited to

24

months of rent for the

first

three

years of the term which expires in

March 2020.

Nathan’s has recorded a liability of

$217,000

in connection with the Brooklyn Guaranty which does

not

include potential percentage rent, real estate tax increases, attorney’s fees and other costs as these amounts are

not

reasonably determinable at this time. Nathan’s has received a personal guaranty from the franchisee for all obligations under the Brooklyn Guaranty. For the remainder of the term, the Brooklyn Guaranty is limited to

12

months of rent plus reasonable costs of collection and attorney’s fees.                 

2.

Contingencies

The Company and its subsidiaries are from time to time involved in ordinary and routine litigation. Management presently believes that the ultimate outcome of these proceedings, individually or in the aggregate, will

not

have a material adverse effect on the Company’s financial position, cash flows or results of operations. Nevertheless, litigation is subject to inherent uncertainties and unfavorable rulings could occur. An unfavorable ruling could include money damages and, in such event, could result in a material adverse impact on the Company’s results of operations for the period in which the ruling occurs.