5.	Commitments and Contingencies:

As of September 26, 2017, the Company had total commitments outstanding of $558,000 related to construction contracts for Bad Daddy’s restaurants currently under development. We anticipate these commitments will be funded out of existing cash or future borrowings against the Cadence Bank credit facility.

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 17 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 $55,000 and $74,000 in contingent rentals for fiscal 2017 and fiscal 2016, respectively.

Following is a summary of operating lease activity for the fiscal years ended September 26, 2017 and September 27, 2016:

	2017			2016
Minimum rentals	$	4,755		$	4,084
Less sublease rentals		(388	)		(383	)
Net rent paid	$	4,367		$	3,701

As of September 26, 2017, 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,

2018	$	5,763
2019		5,543
2020		4,944
2021		4,481
2022		4,355
Thereafter		17,291
		42,377
Less sublease rentals		(1,147	)
	$	41,230

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.