Commitments and Contingencies

12 Months Ended

Sep. 30, 2012

Commitments and Contingencies

5.

Commitments and Contingencies:

The Company’s office space, and the land and buildings related to the Drive Thru restaurant facilities are classified as operating leases and expire over the next 13 years. Some leases contain escalation clauses over the lives of the leases. Most of the leases contain one to three five-year renewal options at the end of the initial term. Certain leases include provisions for additional contingent rent payments if sales volumes exceed specified levels. The Company paid no material contingent rentals during fiscal 2012 and 2011.

Following is a summary of operating lease activities:

	Year Ended September 30, 2012
Minimum rentals	$ 1,993,000
Less sublease rentals	(405,000)
Net rent paid	$ 1,588,000

As of September 30, 2012, future minimum rental commitments required under the Company’s operating leases that have initial or remaining noncancellable lease terms in excess of one year are as follows:

Years Ending September 30
2013	$ 1,903,000
2014	1,699,000
2015	1,301,000
2016	1,131,000
2017	1,132,000
Thereafter	4,325,000
	11,491,000
Less sublease rentals	(2,877,000)
	$ 8,614,000

The Company is contingently liable on the sublease rentals disclosed above. The subleased and assigned leases expire between 2015 and 2024. In the past the Company has never been required to pay any significant amount in connection with its guarantees and currently we have not been notified nor are we aware of any leases in default by the franchisees, however there can be no assurance that there will not be such defaults in the future which could have a material effect on our future operating results.