Commitments and Contingencies

Through 2011, we converted a total of 123 former Flying J restaurant sites to Denny's. We are not party to the individual leases or debt agreements related to the restaurants operated by franchisees. However, we have guaranteed up to $2.0 million of lease payments to Pilot Flying J during the first five years of the related leases. Additionally, we have guaranteed a limited amount of debt payments to lenders under certain loan pools through the term of the related loans, which is generally five years. There were $4.6 million and $7.2 million of loans outstanding under the loan pools as of December 25, 2013 and December 26, 2012, respectively. Payments under these guarantees would result from the inability of a franchisee to fund required payments when due. Through December 25, 2013, no events had occurred that caused us to make payments under the guarantees. As of December 25, 2013, the maximum amounts payable under the lease guarantee and loan guarantees were $2.0 million and $0.7 million, respectively. As a result of these guarantees, we have recorded liabilities of approximately $0.1 million, as of December 25, 2013 and December 26, 2012, which are included as a component of other noncurrent liabilities and deferred credits in our Consolidated Balance Sheets and other nonoperating expense in our Consolidated Statements of Income.

To support domestic franchised growth, we have arranged a program that provides up to $100 million in loans to new and existing franchisees that open new restaurants in under-penetrated markets. We guarantee up to the lesser of $12 million or 12% of the total outstanding loans under the program. There were $1.5 million of loans outstanding under this program as of December 25, 2013. There were no loans outstanding as of December 26, 2012. Payments under this guarantee would result from the inability of a franchisee to fund required payments when due. Through December 25, 2013, no events had occurred that caused us to make payments under the guarantee. As a result of this guarantee, we have recorded a liability of less than $0.1 million as of December 25, 2013, which is included as a component of other noncurrent liabilities and deferred credits in our Consolidated Balance Sheets and other nonoperating expense in our Consolidated Statements of Income.

During 2013, we arranged a program that provides up to $247.5 million in loans to franchisees related to our current remodel program. We guarantee up to 5% of the total outstanding loans under the program. Payments under this guarantee would result from the inability of a franchisee to fund required payments when due. There were no loans outstanding as of December 25, 2013.

There are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In the opinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affect the Company's consolidated results of operations or financial position.

We have amounts payable under purchase contracts for food and non-food products. Many of these agreements do not obligate us to purchase any specific volumes and include provisions that would allow us to cancel such agreements with appropriate notice. Our future commitments for both company and franchised restaurants at December 25, 2013 under these contracts consist of the following:



	Purchase Obligations
	(In thousands)
Payments due by period:
Less than 1 year	$	185,008
1-2 years	26,231
3-4 years	—
5 years and thereafter	—
Total	$	211,239

For agreements with cancellation provisions, amounts included in the table above represent our estimate of purchase obligations during the periods presented if we were to cancel these contracts with appropriate notice. We would likely take delivery of goods under such circumstances.