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CONTINGENCIES | 9 Months Ended
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Mar. 29, 2017
Commitments and Contingencies Disclosure [Abstract] |
CONTINGENCIES | CONTINGENCIES In connection with the sale of restaurants to franchisees and brand divestitures, we have, in certain cases, guaranteed lease payments. As of March 29, 2017 and June 29, 2016, we have outstanding lease guarantees or are secondarily liable for $71.3 million and $72.9 million, respectively. These amounts represent the maximum potential liability of future payments under the guarantees. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from fiscal 2017 through fiscal 2027. In the event of default, the indemnity and default clauses in our assignment agreements govern our ability to pursue and recover damages incurred. During the third quarter of fiscal 2017, one of our divested brands ceased rental payments related to one of its properties that is subleased from Brinker. As a result of this action we recorded a lease liability of approximately $0.4 million. We will continue to assess the financial viability of this brand based on available information to evaluate the possibility that additional losses may occur. We have not been informed of any other lease defaults. No other liabilities have been recorded as of March 29, 2017. We provide letters of credit to various insurers to collateralize obligations for outstanding claims. As of March 29, 2017, we had $26.9 million in undrawn standby letters of credit outstanding. All standby letters of credit are renewable annually. Evaluating contingencies related to litigation is a complex process involving subjective judgment on the potential outcome of future events, and the ultimate resolution of litigated claims may differ from our current analysis. Accordingly, we review the adequacy of accruals and disclosures pertaining to litigated matters each quarter in consultation with legal counsel, and we assess the probability and range of possible losses associated with contingencies for potential accrual in the consolidated financial statements. We are engaged in various legal proceedings and have certain unresolved claims pending. Reserves have been established based on our best estimates of our potential liability in certain of these matters. Based upon consultation with legal counsel, management is of the opinion that there are no matters pending or threatened which are expected to have a material adverse effect, individually or in the aggregate, on our consolidated financial condition or results of operations.

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