In accordance with FASB Accounting Standards Codification for Property, Plant, and Equipment, we evaluate restaurant sites and long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of restaurant sites to be held and used is measured by a comparison of the carrying amount of the restaurant site to the undiscounted future net cash flows expected to be generated on a restaurant-by-restaurant basis. If a restaurant is determined to be impaired, the loss is measured by the amount by which the carrying amount of the restaurant site exceeds its fair value. Fair value is estimated based on the best information available including estimated future cash flows, expected growth rates in comparable restaurant sales, remaining lease terms and other factors. If these assumptions change in the future, we may be required to take additional impairment charges for the related assets. Considerable management judgment is necessary to estimate future cash flows. Accordingly, actual results could vary significantly from such estimates. Restaurant sites that are operating but have been previously impaired are reported at the lower of their carrying amount or fair value less estimated costs to sell. Following is a summary of these events during the second quarter of fiscal 2011 and fiscal 2010.

Asset Impairment and Estimated Lease Termination and Other Closing Costs (in thousands):

			Three Months Ended		Six Months Ended
Restaurants		Reason	July 3, 2011		July 3, 2011

Palatine, IL		Costs for a closed restaurant⁽¹⁾	$	15	$	38
Gaithersburg, MD		Asset impairment⁽²⁾		0		148
	Total for 2011		$	15	$	186


⁽¹⁾The Company incurred various costs for a previously closed restaurant.
⁽²⁾Based on the Company’s assessment of expected cash flows, an asset impairment charge was recorded, in accordance with FASB Accounting Standards Codification for Property Plant and Equipment, for this restaurant which we expect to relocate within its existing market in early 2013.

Asset Impairment and Estimated Lease Termination and Other Closing Costs (in thousands):

			Three Months Ended		Six Months Ended
Restaurants		Reason	July 4, 2010		July 4, 2010

Various		Costs for closed restaurants⁽¹⁾	$	2	$	12
Marietta, GA		Gain on lease termination⁽²⁾		0		(84)
	Total for 2010		$	2	$	(72)


⁽¹⁾The Company incurred various costs for previously closed restaurants.
⁽²⁾During the year, the Company negotiated lease buyout for this location. Total termination fees were approximately $506,000 less lease reserve of approximately $591,000 for a net gain of approximately $84,000.