Papa Johns 2011 Annual Report Download - page 81

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76
14. Related Party Transactions
Certain of our officers and directors own equity interests in entities that franchise restaurants. Following
is a summary of full-year transactions and year-end balances with franchisees owned by related parties,
the Marketing Fund and Papa Card, Inc. (in thousands):
2011
2010
2009
Revenues from affiliates:
Commissary sales 22,132$ 19,137$ 17,625$
Other sales 2,352 1,961 2,284
Franchise royalties 3,579 3,192 2,514
Franchise and development fees 1 5 - 5 0
Total 28,078$ 24,290$ 22,473$
Other income from affiliates -$ -$ 57$
Accounts receivable - affiliates 682$ 624$ 648$
We paid $1.0 million in 2011, $443,000 in 2010 and $755,000 in 2009 for charter aircraft services
provided by an entity owned by our Founder, Chairman and Chief Executive Officer.
We contributed $6.0 million in 2010 and $7.7 million in 2009 to the Marketing Fund as discretionary
advertising contributions (none in 2011).
See Note 3 for information related to our purchasing agreement with BIBP.
15. Commitments and Contingencies
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 eight years. Total lease expense was $25.7 million in 2011, $24.5 million
in 2010 and $24.2 million in 2009, net of sublease payments received.
We subleased certain sites to our Papa John’s franchisees located in the United Kingdom in 2011, 2010
and 2009 and received payments of $3.7 million, $3.1 million and $2.9 million, respectively, which are
netted with international operating expenses.