Chili's 2011 Annual Report Download - page 24

Restaurant Property Information
The following table illustrates the approximate average dining capacity for each current prototypical
restaurant in our restaurant brands:
Chili’s Maggiano’s
Square Feet .............................................. 3,930-5,450 12,000-17,000
Dining Seats ............................................. 150-220 500-700
Dining Tables ............................................ 35-50 100-150
The leases typically provide for a fixed rental plus percentage rentals based on sales volume. At
June 29, 2011, we owned the land and building for 189 of our 868 company-operated restaurant locations. For
these 189 restaurant locations, the net book value for the land was $142 million and for the buildings was
$132 million. For the remaining 679 restaurant locations leased by us, the net book value of the buildings and
leasehold improvements was $591 million. The 679 leased restaurant locations can be categorized as follows:
536 are ground leases (where we lease land only, but own the building) and 143 are retail leases (where we lease
the land/retail space and building). We believe that our properties are suitable, adequate, well-maintained and
sufficient for the operations contemplated. Some of our leased restaurants are leased for an initial lease term of
5 to 30 years, with renewal terms of 1 to 35 years.
Other Properties
We own an office building containing approximately 108,000 square feet which we use for part of our
corporate headquarters and menu development activities. We lease an additional office complex containing
approximately 198,000 square feet for the remainder of our corporate headquarters which is currently utilized by
us, reserved for future expansion of our headquarters, or sublet to third parties. Because of our operations
throughout the United States, we also lease office space in California, Colorado, Florida, New Jersey and Texas
for use as regional operation offices. The size of these office leases range from approximately 100 square feet to
approximately 4,000 square feet.
Item 3. LEGAL PROCEEDINGS.
Certain current and former hourly restaurant employees filed a lawsuit against us in California Superior
Court alleging violations of California labor laws with respect to meal and rest breaks. The lawsuit seeks
penalties and attorneys’ fees and was certified as a class action in July 2006. On July 22, 2008, the California
Court of Appeals decertified the class action on all claims with prejudice. On October 22, 2008, the California
Supreme Court granted writ to review the decision of the Court of Appeals. We intend to vigorously defend our
position. It is not possible at this time to reasonably estimate the possible loss or range of loss, if any.
We are engaged in various other legal proceedings and have certain unresolved claims pending. Reserves
have been established based on our best estimates of our potential liability in certain of these matters. The
ultimate liability, if any, for the aggregate amounts claimed cannot be determined at this time. Based upon
consultation with legal counsel, management is of the opinion that there are no matters pending or threatened
which are expected to have a material adverse effect, individually or in the aggregate, on our consolidated
financial condition or results of operations.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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