Papa Johns 2010 Annual Report Download - page 28

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21
Most Papa John’s restaurants are located in leased space. The initial term of most domestic restaurant
leases is generally five years with most leases providing for one or more options to renew for at least one
additional term. Virtually all of our leases specify a fixed annual rent. Generally, the leases are triple net
leases, which require us to pay all or a portion of the cost of insurance, taxes and utilities. Certain leases
further provide that the lease payments may be increased annually, with a small number of escalations
based on changes in the Consumer Price Index.
We have 43 Company-owned restaurants that are located in buildings we own on land either owned or
leased by us. These restaurants range from 1,000 to 3,000 square feet. Three of these restaurants are
located in multi-bay facilities. These multi-bay facilities contain from 2,800 to 5,000 square feet, and the
space not utilized by the Papa John’s restaurant in each facility is leased or held for lease to third-party
tenants.
At December 26, 2010, we had 151 Papa John’s franchised restaurants located in the United Kingdom.
We leased and subleased to franchisees 102 of the 151 franchised Papa John’s restaurant sites in the
United Kingdom. The initial lease terms on the Company and franchised sites are generally 10 to 15
years. The initial lease terms of the franchisee subleases are generally five to ten years. Additionally, we
leased 21 Company-owned restaurant sites in Beijing, China as of December 26, 2010.
Information with respect to our leased domestic QC Centers as of December 26, 2010 is set forth below:
Facility Square Footage
Raleigh, NC 61,000
Denver, CO 32,000
Phoenix, AZ 57,000
Des Moines, IA 43,000
Portland, OR 37,000
Pittsburgh, PA 52,000
Cranbury, NJ 59,000
We own land in Orlando, Florida on which our 63,000 square foot full-service QC Center is located. We
also own land and a 175,000 square foot facility in Dallas, Texas, of which 77,500 square feet is used by
our full-service QC Center and the remaining space is leased to a third-party tenant. In addition, we own
land in Louisville, Kentucky, on a portion of which is located a 42,000 square foot building housing our
printing operations and a 247,000 square foot building, approximately 30% to 40% of which
accommodates the Louisville QC Center operation and promotions division. The remainder of the larger
building houses our corporate offices. We own a 49,000 square foot full-service QC Center in the United
Kingdom. The Papa John’s UK management team is located in a leased office near London with a
remaining lease term of six years. The Papa John’s China management team leases an office and a QC
Center in Beijing, China. The Papa John’s Mexico management team and QC Center lease a facility in
Mexico City, Mexico.
Item 3. Legal Proceedings
We are subject to claims and legal actions in the ordinary course of our business. We believe that none of
the claims and actions currently pending against us would have a material adverse effect on us if decided
in a manner unfavorable to us.
Item 4. Removed and Reserved