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NOTE Q – LEASES
The Company is party as lessee to various leases for land, buildings and certain office equipment for its Company-owned restaurants and corporate office. The Company previously leased and subleased one property; this arrangement was terminated on November 4, 2025.
Company as lessee
The components of the net lease cost for the thirteen week periods ended June 28, 2026 and June 29, 2025 were as follows (in thousands):
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Thirteen weeks ended
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June 28, 2026
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June 29, 2025
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Operating lease cost
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$ |
439 |
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$ |
438 |
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Variable lease cost
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|
474 |
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|
464 |
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Less: Sublease income, net
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|
|
- |
|
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|
(21 |
) |
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|
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|
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Total net lease cost
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$ |
913 |
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$ |
881 |
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The components of the net lease cost are included in the Condensed Consolidated Statement of Earnings for the thirteen week periods ended June 28, 2026 and June 29, 2025 as follows (in thousands):
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Thirteen weeks ended
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June 28, 2026
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June 29, 2025
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|
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Restaurant operating expenses
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$ |
692 |
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|
$ |
682 |
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General and administrative expenses
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|
221 |
|
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|
220 |
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Less: Other income, net
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|
- |
|
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(21 |
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|
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|
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Total net lease cost
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$ |
913 |
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$ |
881 |
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Cash paid for amounts included in the measurement of lease liabilities for the thirteen week periods ended June 28, 2026 and June 29, 2025 were as follows (in thousands):
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Thirteen weeks ended
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June 28, 2026
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June 29, 2025
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Operating cash flows from operating leases
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$ |
566 |
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$ |
561 |
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The weighted average remaining lease term and weighted average discount rate for operating leases as of June 28, 2026 were as follows:
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Weighted average remaining lease term (years):
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2.3 |
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Weighted average discount rate:
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8.449 |
% |
Future lease commitments to be paid and received by the Company as of June 28, 2026 were as follows (in thousands):
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Payments
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Receipts
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Operating Leases
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Subleases
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Net Leases
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Fiscal year:
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2027(a)
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$ |
1,375 |
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$ |
67 |
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$ |
1,308 |
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2028
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|
1,790 |
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|
115 |
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1,675 |
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2029
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|
440 |
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|
- |
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|
440 |
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2030
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|
|
171 |
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|
- |
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|
171 |
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Total lease commitments
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$ |
3,776 |
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$ |
182 |
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$ |
3,594 |
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Less: Amount representing interest
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(322 |
) |
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Present value of lease liabilities (b)
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$ |
3,454 |
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(a)
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Represents future lease commitments to be paid and received by the Company for the remainder of the 2027 fiscal year. Amount does not include $520 of lease commitments paid and received by the Company for the thirteen week period ended June 28, 2026.
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(b)
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The present value of minimum operating lease payments of $1,944 and $1,510 are included in “Current portion of operating lease liabilities” and “Long-term portion of operating lease liabilities,” respectively, on the Condensed Consolidated Balance Sheet.
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Company as lessor
The components of lease income for the thirteen week periods ended June 28, 2026 and June 29, 2025 were as follows (in thousands):
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Thirteen weeks ended
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June 28, 2026
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June 29, 2025
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Operating lease income, net
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$ |
- |
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$ |
21 |
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