Papa Johns 1999 Annual Report Download - page 62

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Notes to Consolidated Financial Statements (continued)
12. Related Party Transactions
Certain of our officers and directors own equity interests in entities that operate and/or have rights to develop franchised restaurants.
Certain of these affiliated entities have agreements to acquire area development rights at reduced development fees and also pay
reduced initial franchise fees when restaurants are opened. All such entities pay royalties at the same rate as other franchisees.
Following is a summary of transactions and balances with affiliated entities (in thousands):
1999 1998 1997
Revenues from affiliates:
Commissary sales $ 80,336 $ 64,977 $ 47,153
Equipment and other sales 10,423 10,721 8,187
Franchise royalties 10,530 8,067 6,265
Franchise and development fees 1,574 1,372 1,381
Total $ 102,863 $ 85,137 $ 62,986
Other income from affiliates $ 314 $ 570 $ 514
Accounts receivable-affiliates $ 3,302 $ 2,273 $ 2,454
Notes receivable-affiliates $ 3,590 $ 4,741 $ 7,997
We paid $1.3 million in 1999, $966,000 in 1998 and $689,000 in 1997 for charter aircraft services provided by entities owned by
certain directors and officers, including the Chief Executive Officer of Papa John’s.
We advanced $198,000 in 1999, $183,000 in 1998 and $197,000 in 1997, in premiums for split-dollar life insurance coverage
on the Chief Executive Officer for the purpose of funding estate tax obligations. Papa John’s and the officer share the cost of the
premiums. The premiums advanced by us will be repaid out of the cash value or proceeds of the policies.
During the fourth quarter of 1999, we sold five restaurants to Capital Pizza, Inc., for total consideration of $1.6 million ($1.4 million
in cash and $200,000 as a note receivable) and acquired one restaurant from Capital Pizza, Inc. for total consideration of $190,000, in
which we forgave a note payable to us. Capital Pizza, Inc. is owned by certain of our officers, including our Vice Chairman and President.
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