Commitments and Contingencies

12 Months Ended

Sep. 27, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies:

The Company’s office space, and the land and buildings related to the Drive Thru and Bad Daddy’s restaurant facilities are classified as operating leases and expire over the next 19 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 $74,000 and $41,000 in contingent rentals for fiscal 2016 and fiscal 2015, respectively.

Following is a summary of operating lease activity for the fiscal years ended September 27, 2016 and September 30, 2015:

	2016			2015
Minimum rentals	$	4,084		$	2,944
Less sublease rentals		(383	)		(375	)
Net rent paid	$	3,701		$	2,569

As of September 27, 2016, future minimum rental commitments required under the Company’s operating leases that have initial or remaining non-cancellable lease terms in excess of one year are as follows:

Years Ending September,
2017	$	4,464
2018		4,496
2019		4,212
2020		3,603
2021		3,033
Thereafter		12,290
		32,098
Less sublease rentals		(1,535	)
	$	30,563

The Company is contingently liable on the sublease rentals disclosed above. The subleased and assigned leases expire between 2018 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.