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Related Party Transactions
 6 Months Ended
Jul. 01, 2014
Related Party Transactions  
Related Party Transactions

(9)   Related Party Transactions

 

The Longview, Texas restaurant, which was acquired by us in connection with the completion of our initial public offering, leases the land and restaurant building from an entity controlled by Steven L. Ortiz, our Chief Operating Officer. The initial lease term was 15 years and was scheduled to terminate in November 2014. We exercised our first renewal term so the lease will now expire on October 31, 2019. The lease can be renewed for three additional terms of five years each. Rent is approximately $19,000 per month. The lease can be terminated if the tenant fails to pay the rent on a timely basis, fails to maintain the insurance specified in the lease, fails to maintain the building or property or becomes insolvent. Total rent payments were approximately $0.1 million for each of the 13 weeks ended July 1, 2014 and June 25, 2013.  For each of the 26 week periods ended July 1, 2014 and June 25, 2013, rent payments were approximately $0.1 million.

 

The Bossier City, Louisiana restaurant, of which Mr. Ortiz beneficially owns 66.0% and we own 5.0%, leases the land and restaurant building from an entity owned by Mr. Ortiz.  The lease term is 15 years and will terminate on March 31, 2020.   Rent is approximately $16,600 per month and escalates 10% each five year period during the term.  The next rent escalation is in the second quarter of 2015.  The lease can be terminated if the tenant fails to pay rent on a timely basis, fails to maintain insurance, abandons the property or becomes insolvent.  Total rent payments were approximately $0.1 million for each of the 13 weeks ended July 1, 2014 and June 25, 2013.  For each of the 26 week periods ended July 1, 2014 and June 25, 2013, rent payments were approximately $0.1 million.

 

We have 15 franchise restaurants owned in whole or part, by certain of our officers, directors and stockholders of the Company as of July 1, 2014 and June 25, 2013. These entities paid us fees of approximately $0.6 million for both of the 13 weeks ended July 1, 2014 and June 25, 2013. For the 26 week periods ended July 1, 2014 and June 25, 2013, these entities paid us fees of approximately $1.3 million and $1.2 million, respectively.  As disclosed in note 7, we are contingently liable on leases which are related to three of these restaurants.