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LEASES | 12 Months Ended
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Oct. 03, 2020
Leases [Abstract] |
LEASES | LEASES Other than locations where we own the underlying property, we lease our restaurant locations as well as our corporate office under various non-cancelable real-estate lease agreements that expire on various dates through 2044. We evaluate whether we control the use of the asset, which is determined by assessing whether we obtain substantially all economic benefits from the use of the asset, and whether we have the right to direct the use of the asset. If these criteria are met and we have identified a lease, we account for the contract under the requirements of ASC 842. Upon taking possession of a leased asset, we determine its classification as an operating or finance lease. All of our real estate leases are classified as operating leases. We do not have any finance leases as of October 3, 2020. Generally, our real estate leases have initial terms ranging from 10 to 25 years and typically include renewal options. Renewal options are recognized as part of the ROU assets and lease liabilities if it is reasonably certain at the date of adoption that we would exercise the options to extend the lease. Our real estate leases typically provide for fixed minimum rent payments and/or contingent rent payments based upon sales in excess of specified thresholds. When the achievement of such sales thresholds are deemed to be probable, variable lease expense is accrued in proportion to the sales recognized during the period. For operating leases that include rent holidays and rent escalation clauses, we recognize lease expense on a straight-line basis over the lease term from the date we take possession of the leased property. We record the straight-line lease expense and any contingent rent, if applicable, in occupancy expenses in the consolidated statements of operations. Many of our real estate leases also require us to pay real estate taxes, common area maintenance costs and other occupancy costs (“non-lease components”) which are included in occupancy related expenses in the consolidated statements of operations. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As there were no explicit rates provided in our leases, we used our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. During the third quarter of 2020, the Company suspended the vast majority of lease payments while its restaurants were closed by government mandated shutdowns as a result of the COVID-19 pandemic. The Company was able to negotiate rent concessions, abatements and deferrals with landlords on many of our operating leases and several negotiations are still ongoing. In July 2020, the FASB issued a clarification to accounting for lease concessions in response to the COVID-19 pandemic to reduce the operational challenges and complexity of lease accounting. The Company used the relief provisions provided by FASB and made an election to account for the lease concessions as if they were part of the original lease agreement. The recognition of rent concessions did not have a material impact on our consolidated financial statements. The components of lease expense in the consolidated statements of operations are as follows:
| October 3, 2020
| (in thousands)
Operating lease expense - occupancy expenses (1) | $ | 9,449 |
Occupancy lease expense - general and administrative expenses | 635 |
Variable lease expense | 2,960 |
Total lease expense | $ | 13,044 |
____________________ (1) Includes short-term leases, which are immaterial. Supplemental cash flow information related leases:
| October 3, 2020
| (in thousands)
Cash paid for amounts included in the measurement of lease liabilities: |
Operating cash flows related to operating leases | $ | 9,500 |
Non-cash investing activities: |
ROU assets obtained in exchange for new operating lease liabilities | $ | 62,330 |
The weighted average remaining lease terms and discount rate as of October 3, 2020 are as follows:
| Weighted Average Remaining Lease Term |  | Weighted Average Discount Rate
Operating leases | 10.7 years |  | 5.5 | %
The annual maturities of our lease liabilities as of October 3, 2020 are as follows:
Fiscal Year Ending |  |  | Operating Leases
|  |  | (in thousands)
October 2, 2021 |  |  | $ | 9,015 |
October 1, 2022 |  |  | 9,313 |
September 30, 2023 |  |  | 7,799 |
September 28, 2024 |  |  | 7,413 |
September 27, 2025 |  |  | 6,429 |
Thereafter |  |  | 34,163 |
Total future lease payments |  |  | 74,132 |
Less imputed interest |  |  | (18,055) |
Present value of lease liabilities |  |  | $ | 56,077 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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