Commitments and Contingencies

12 Months Ended

Sep. 24, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5. Commitments and Contingencies:

As of September 24, 2019, the Company had total commitments outstanding of $221,000 related to a construction contract for one Bad Daddy’s restaurant 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 18 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 $32,000 and $83,000 in contingent rentals for fiscal 2019 and fiscal 2018, respectively.

Following is a summary of operating lease activity for the fiscal years ended September 24, 2019 and September 25, 2018:

	2019			2018
Minimum rentals	$	6,671		$	5,972
Less sublease rentals		(239	)		(404	)
Net rent expense paid	$	6,432		$	5,568

As of September 24, 2019, 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
2020	$	7,256
2021		6,884
2022		6,677
2023		6,348
2024		5,928
Thereafter		18,988
		52,081
Less sublease rentals		(1,058	)
	$	51,023

The Company is contingently liable on the sublease rentals disclosed above. The subleased and assigned leases expire between 2020 and 2025. In the past the Company has never been required to pay any significant amount in connection with its guarantees. 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.