v3.6.0.2

CREDIT FACILITY AND DEBT COVENANTS, LONG-TERM DEBT, AND FINANCING LEASE OBLIGATIONS | 12 Months Ended
--- | ---
Jan. 01, 2017
Debt Disclosure [Abstract] |
Credit Facility, Long-Term Debt and Debt Covenants Disclosure [Text Block] | (7) CREDIT FACILITY AND DEBT COVENANTS, AND FINANCING LEASE OBLIGATIONS On December 2, 2016 (the “Effective Date”), Famous Dave’s of America, Inc. (the “Company”) entered into a Loan Agreement (the “First Loan Agreement”) among the Company and Minwood Partners, Inc., as borrowers, and Venture Bank, as lender (the “Lender”). Also on the Effective Date, the Company entered into a loan agreement providing among the Company, as lead borrower, certain of its affiliates also as borrowers, and the Lender for two additional loans (the “Second Loan Agreement”). The First Loan Agreement provides for a loan from the Lender to the borrowers set forth therein in the principal amount of $3.7 million and is evidenced by a promissory note (the “Firs t Note”) executed and delivered by the borrowers to the Lender on the Effective Date. The First Note has a maturity date of December 2, 2026 and shall be paid in monthly installments of principal and interest based on a twenty-year amortization period. Int erest per annum shall be at a rate of 4.25% for years 1 through 5 and for years 6 through the end of the term LIBOR rate plus 375 basis points, subject to adjustment at the discretion of the Lender, as further set forth therein. The First Note may be prepa id, subject to certain prepayment premiums, provided, however, that during any calendar year the borrowers may prepay principal of up to 20% of the original principal amount without paying a prepayment premium. Proceeds from the First Loan Agreement were u sed to repay the Company’s debt to Wells Fargo Bank, National Association and to pay certain other costs approved by the Lender. The First Loan Agreement is secured by a mortgage and security agreement and fixture financing statement (the “First Mortgage”) granting to the Lender a security interest in and title to certain real property in the state of Minnesota and as more fully described therein. The First Loan Agreement contains customary representations and warranties and financial and other covenants an d conditions, including, among other things, minimum debt service coverage ratio and a post-closing covenant to obtain certain letters of credit. The First Loan Agreement also places certain restrictions on, among other things, the borrowers’ ability to in cur additional indebtedness, to create liens or other encumbrances, to use funds for purposes other than as stated therein, to sell or otherwise dispose of assets and to expand on or erect any new material improvements, as such term is defined therein. In addition, the First Loan Agreement contains events of default (subject to certain materiality thresholds and grace periods), including, without limitation, payment defaults; breaches of covenants; breaches of representations and warranties; failure to perf orm remediation of any environmental matters on the mortgaged property, as set forth in the First Mortgage; failure to perform or observe the covenants, conditions or terms of the First Loan Agreement and related agreements; certain bankruptcy events of th e borrowers and failure to timely provide financial statements. The Second Loan Agreement provides for two separate loans from the Lender to the borrowers set forth therein in the aggregate principal amount of $7.3 million, one in the principal amount of $6.3 million (“Loan 2”) and the other in the principal amount of $1.0 million (“Loan 3”). Loan 2 is evidenced by a promissory note in the principal amount of $6.3 million (the “Second Note”). The Second Note has a maturity date of December 2, 2023 and shall be paid in monthly installments of principal and interest based on a seven-year amortization period. Interest per annum shall be at a rate equal to the LIBOR rate plus 325 basis points (each of such terms as defined in the Second Note), subject to adjustm ent at the discretion of the Lender and as further set forth therein. The Second Note may be prepaid at any time without incurring a prepayment premium. Loan 3 is evidenced by a promissory note in the principal amount of $1.0 million (the “Third Note”). The Third Note has a maturity date of December 2, 2019 and shall first be paid in monthly installments of the interest then accrued on the principal balance and then in full on the maturity date. Interest per annum shall be at a rate equal to the LIBOR rat e plus 325 basis points (each of such terms as defined in the Third Note), subject to adjustment at the discretion of the Lender, as further set forth therein. The Third Note may be prepaid at any time without incurring a prepayment premium. Proceeds from the Second Loan Agreement were used to repay the Company’s debt to Wells Fargo Bank, National Association, with the remainder to be used as a line of credit as working capital for borrowers’ business and pay certain other costs approved by the Lender. Loan 2 is secured by a mortgage dated as of the Effective Date (the “Second Mortgage”) which is subordinate to the First Mortgage, a security interest in substantially all of the personal property of the borrowers pursuant to a security agreement dated as of t he Effective Date (the “Security Agreement”) and a pledge of certain certificates of deposit pursuant to a pledge agreement also dated as of the Effective Date (the “Pledge Agreement”). Loan 3 is secured by a security interest on substantially all of the p ersonal property of the borrowers pursuant to the Security Agreement and a pledge of certain certificates of deposit pursuant to the Pledge Agreement. The Second Loan Agreement contains customary representations and warranties and financial and other coven ants and conditions, including, among other things, minimum debt service coverage ratio and a post-closing covenant to obtain certain letters of credit. The Second Loan Agreement also places certain restrictions on, among other things, the borrowers’ abili ty to incur additional indebtedness, to use funds for purposes other than as stated therein, to create liens or other encumbrances, to sell or otherwise dispose of assets and to expand on or erect any new material improvements, as such term is defined ther ein. In addition, the Second Loan Agreement contains events of default (subject to certain materiality thresholds and grace periods), including, without limitation, payment defaults; breaches of covenants; breaches of representations and warranties; failur e to perform remediation of any environmental matters on the mortgaged property, as set forth in the Second Mortgage; failure to perform or observe the covenants, conditions or terms of the Second Loan Agreement and related agreements; certain bankruptcy e vents of the borrowers and failure to timely provide financial statements. If an event of default were to occur, the Lender has the right to call the debt prior to expiration. On December 2, 2016, the Company refinanced approximately $9.9 million f rom borrowings under the First Loan Agreement and Second Loan Agreement to fund repayment of certain outstanding amounts under the Third Amended and Restated Credit Agreement dated as of May 8, 2015, as amended (the “Credit Agreement”) by and among the Com pany and its subsidiaries and Wells Fargo Bank, National Association, as administrative agent on behalf of the Lenders under the Credit Agreemen t. For a period of up to 45 days following December 2, 2016, one letter of credit in the amount of $625,000 and a related cash collateral pledge remained outstanding under the Credit Agreement. Other than this letter of credit and related pledge, as well as certain breakage and treasury service management fees, the Company’s obligations under the Credit Agreement we re terminated on December 2, 2016. At January 1, 2017, the Company had $1.0 million of additional borrowing capacity in Loan 3. The weighted average interest rate of the First, Second and Third notes for the fiscal year ended January 1, 2017 was 4.0%. The weighted average interest rate of the Term Loans for fiscal years ended January 1, 2017 and January 3, 2016 was 3.69% and 2.66%, respectively. As of January 1, 2017, we were in compliance with all of our covenants. If, in the event of a de fault, the Lender were to call the debt prior to expiration, the Company believes there are multiple options available to obtain other sources of financing. Although possibly at different terms, the Company believes there would be other lenders available and willing to fi nance a new credit facility. However, if replacement financing were unavailable to us, termination of the Facility without adequate replacement would have a material and adverse impact on our ability to continue our business operations. We expect to us e any borrowings under the Credit Agreement for general working capital purchases as needed.
| (in thousands) |  | January 1, |  | January 3,
|  |  |  | 2017 |  | 2016
| Notes Payable - Wells Fargo - minimum monthly |  |  |  |  |  |
| installments of $150 until December 31, 2018, followed |  |  |  |  |  |
| by a balloon payment of approximately $6,750 plus interest. |  | $ | --- |  | $ | 12,000
| First Note - Venture Bank - monthly installments of |  |  |  |  |  |
| principal and interest until December 2, 2026 |  |  | 3,700 |  |  | ---
| Second Note - Venture Bank - monthly |  |  |  |  |  |
| payments of principal and interest until December 2, 2023 |  |  | 6,300 |  |  | ---
| Less: deferred financing fees |  |  | (234) |  |  | (80)
| Less: current maturities |  |  | (917) |  |  | (1,800)
|  | Long-term debt net of current maturities |  | $ | 8,849 |  | $ | 10,120
Required principal payments on long-term debt are as follows:
| (in thousands) |  |
| Fiscal Year |  |
|  | 2017 | $ | 917
|  | 2018 |  | 954
|  | 2019 |  | 993
|  | 2020 |  | 1,120
|  | 2021 |  | 988
|  | Thereafter |  | 5,028
|  |  | Total | $ | 10,000
Financing Lease Obligation On March 31, 1999, the Company completed a $4.5 million financing obligation involving three existing restaurants as part of a sale/leaseback transaction. Under this financing, we are obligated to make monthly payments of $5 6,627 (which increases 4.04% every two years) for a minimum of 20 years. At the end of the 20 year lease term, we may extend the lease for up to two additional five year terms. We also have the option to purchase the leased restaurants on the 20th annive rsary of the lease term and between the first and second five year option terms. The option purchase price is the greater of $4.5 million or the fair market value, as defined in the agreement, of the properties at the time the purchase option is exercised. Based upon our continued involvement in the leased property and its purchase option, the transaction has been accounted for as a financing arrangement. Accordingly, the three existing restaurants are included in property, equipment and leasehold improve ments, and are be ing depreciated over a 2 0 year term. In addition, as the monthly lease payments are made, the obligation will be reduced by the 20 year amortization table. Financing lease obligations consisted of the following at:
| (in thousands) |  | January 1, |  | January 3,
|  |  |  | 2017 |  | 2016
| Financing lease – Spirit Financial – monthly installments of $54-$59 – including an interest rate of 9.63%, due in March 2019. |  | $ | 2,757 |  | $ | 3,150
| Less: deferred financing fees |  |  | (23) |  |  | (33)
| Less: current maturities |  |  | (454) |  |  | (393)
|  | Long-term financing lease net of current maturities |  | $ | 2,280 |  | $ | 2,724
Required future minimum payments under our financing leases are as follows:
| (in thousands) |  |
| Fiscal Year |  |
|  | 2017 | $ | 700
|  | 2018 |  | 707
|  | 2019 |  | 1,838
|  |  | Total minimum payments | $ | 3,245
|  |  | Imputed interest component of minimum payments |  | (488)
|  |  | Total financing lease payable | $ | 2,757

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration