Papa Johns 2014 Annual Report Download - page 92

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79
17. Litigation, Commitments and Contingencies (continued)
Agne v. Papa John’s International, Inc. et al. was a class action filed on May 28, 2010 in the United
States District Court for the Western District of Washington seeking damages for violations of the
Telephone Consumer Protection Act and Washington State telemarketing laws alleging, among other
things that several Papa John’s franchisees retained a vendor to send unsolicited commercial text message
offers primarily in Washington and Oregon. The court granted plaintiff’s motion for class certification in
November 2012; we filed a petition for permission to appeal the court’s ruling on class certification to the
United States Court of Appeals for the Ninth Circuit.
In February 2013, the parties tentatively agreed to the financial terms of a settlement of the litigation. The
court preliminarily approved the terms in June 2013 and granted final approval of the settlement and fee
award in October 2013, following the close of the claims period. The actual settlement cost was $2.9
million, and all settlement and fee payments were made in 2013.
Perrin v. Papa John’s International, Inc. and Papa John’s USA, Inc. is a conditionally certified collective
action filed in August 2009 in the United States District Court, Eastern District of Missouri, alleging that
delivery drivers were not reimbursed for mileage and expenses in accordance with the Fair Labor
Standards Act. Approximately 3,900 drivers out of a potential class size of 28,800 have opted into the
action. In late December 2013, the District Court granted a motion for class certification in five additional
states, which added approximately 15,000 plaintiffs to the case. The trial is scheduled for August 2015.
We intend to vigorously defend against all claims in this lawsuit. However, given the inherent
uncertainties of litigation, the outcome of this case cannot be predicted and the amount of any potential
loss cannot be reasonably estimated. A negative outcome in this case could have a material adverse effect
on the Company.
Leases
We lease office, retail and commissary space under operating leases, which have an average term of five
years and provide for at least one renewal. Certain leases further provide that the lease payments may be
increased annually based on the fixed rate terms or adjustable terms such as the Consumer Price Index.
PJUK, our subsidiary located in the United Kingdom, leases certain retail space, which is primarily
subleased to our franchisees. We also lease the tractors and trailers used by our distribution subsidiary,
PJFS, for an average period of seven years. Total lease expense was $34.7 million in 2014, $33.2 million
in 2013 and $28.7 million in 2012, net of sublease payments received.
We subleased certain sites to our franchisees and other third parties in 2014, 2013 and 2012 and received
payments of $6.7 million, $4.9 million and $3.8 million, respectively, which are netted against the
corresponding expense.