DIVERSIFIED RESTAURANT HOLDINGS, INC., 10-K filed on 3/11/2016
Annual Report
Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 27, 2015
Mar. 9, 2016
Jun. 28, 2015
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
Diversified Restaurant Holdings, Inc. 
 
 
Entity Central Index Key
0001394156 
 
 
Current Fiscal Year End Date
--12-27 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 27, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
26,335,850 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 51.6 
Consolidated Balance Sheets (USD $)
Dec. 27, 2015
Dec. 28, 2014
Current assets
 
 
Cash and cash equivalents
$ 14,200,528 
$ 18,688,281 
Investments
2,917,232 
Accounts receivable
620,942 
1,417,510 
Inventory
1,934,584 
1,335,774 
Prepaid assets
1,618,429 
397,715 
Total current assets
18,374,483 
24,756,512 
Deferred income taxes
13,320,177 
2,960,640 
Property and equipment, net
79,189,661 
71,508,950 
Intangible assets, net
3,984,033 
2,916,498 
Goodwill
50,097,081 
10,998,630 
Other long-term assets
1,152,377 
305,804 
Total assets
166,117,812 
113,447,034 
Current liabilities
 
 
Accounts payable
7,807,552 
7,043,143 
Accrued compensation
3,087,883 
2,786,830 
Other accrued liabilities
3,663,211 
1,357,510 
Current portion of long-term debt
9,918,827 
8,155,903 
Current portion of deferred rent
396,113 
377,812 
Total current liabilities
24,873,586 
19,721,198 
Deferred rent, less current portion
2,826,210 
3,051,445 
Unfavorable operating leases
671,553 
693,497 
Other liabilities
4,463,631 
3,212,376 
Long-term debt, less current portion
116,682,480 
53,612,496 
Total liabilities
149,517,460 
80,291,012 
Commitments and contingencies (Notes 13 and 14)
   
   
Stockholders' equity
 
 
Common stock - $0.0001 par value; 100,000,000 shares authorized; 26,298,725 and 26,149,824, respectively, issued and outstanding
2,584 
2,582 
Additional paid-in capital
36,136,332 
35,668,001 
Accumulated other comprehensive loss
(1,006,667)
(175,156)
Accumulated deficit
(18,531,897)
(2,339,405)
Total stockholders' equity
16,600,352 
33,156,022 
Total liabilities and stockholders' equity
$ 166,117,812 
$ 113,447,034 
Consolidated Balance Sheets (Parentheticals) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Statement of Financial Position [Abstract]
 
 
Common stock, par value (in dollars per share)
$ 0.0001 
$ 0.0001 
Common stock, shares authorized (in shares)
100,000,000 
100,000,000 
Common stock, shares issued (in shares)
26,298,725 
26,149,824 
Common stock, shares outstanding (in shares)
26,298,725 
26,149,824 
Consolidated Statements of Operations (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Income Statement [Abstract]
 
 
 
Revenue
$ 172,485,378 
$ 128,413,448 
$ 108,886,139 
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
 
 
 
Food, beverage, and packaging
49,437,576 
37,058,821 
32,719,254 
Compensation costs
46,315,042 
33,337,000 
28,096,721 
Occupancy
12,377,659 
7,205,420 
6,381,052 
Other operating costs
37,723,846 
27,214,208 
21,675,473 
General and administrative expenses
15,351,440 
8,786,520 
7,270,597 
Pre-opening costs
3,244,157 
3,473,664 
3,230,122 
Depreciation and amortization
16,582,236 
10,956,951 
7,974,481 
Impairment and loss on asset disposals
14,242,705 
1,023,144 
98,162 
Total operating expenses
195,274,661 
129,055,728 
107,445,862 
Operating profit (loss)
(22,789,283)
(642,280)
1,440,277 
Interest expense
(4,211,255)
(2,274,041)
(1,718,711)
Other income (expense), net
822,039 
(58,912)
151,292 
Loss before income taxes
(26,178,499)
(2,975,233)
(127,142)
Income tax benefit
(9,986,007)
(1,706,736)
(261,450)
Net income (loss)
$ (16,192,492)
$ (1,268,497)
$ 134,308 
Basic earnings per share (in dollars per share)
$ (0.62)
$ (0.05)
$ 0.01 
Fully diluted earnings per share (in dollars per share)
$ (0.62)
$ (0.05)
$ 0.01 
Weighted average number of common shares outstanding
 
 
 
Basic (in shares)
26,211,669 
26,092,919 
23,937,188 
Diluted (in shares)
26,211,669 
26,092,919 
24,058,072 
Consolidated Statements of Comprehensive Income (Loss) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Net income (loss)
$ (16,192,492)
$ (1,268,497)
$ 134,308 
Other comprehensive income (loss)
 
 
 
Unrealized changes in fair value of interest rate swaps, net of tax of $430,468, $23,097 and $35,084.
(835,315)
44,836 
68,106 
Unrealized changes in fair value of investments, net of tax of $1,959, $13,071 and $15,030.
3,804 
25,372 
(29,176)
Total other comprehensive income (loss)
(831,511)
70,208 
38,930 
Comprehensive income (loss)
$ (17,024,003)
$ (1,198,289)
$ 173,238 
Consolidated Statements of Comprehensive Income (Loss) (Parentheticals) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Unrealized changes in fair value of interest rate swaps, tax
$ 430,468 
$ 23,097 
$ 35,084 
Unrealized changes in fair value of investments, tax
$ 1,959 
$ 13,071 
$ 15,030 
Consolidated Statements of Stockholders' Equity (USD $)
Total
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Loss
Accumulated Deficit
Balance at beginning of period at Dec. 30, 2012
$ 1,503,904 
$ 1,888 
$ 2,991,526 
$ (284,294)
$ (1,205,216)
Balance at beginning of period (in shares) at Dec. 30, 2012
 
18,951,700 
 
 
 
Issuance of restricted shares (in shares)
 
145,575 
 
 
 
Forfeitures of restricted shares (in shares)
 
(57,108)
 
 
 
Sale of common stock from follow-on public offering, net of fees and expenses
31,907,680 
690 
31,906,990 
 
 
Sale of common stock from follow-on public offering, net of fees and expenses (in shares)
 
6,900,000 
 
 
 
Stock options exercised
74,999 
74,997 
 
 
Stock options exercised (in shares)
 
104,638 
 
 
 
Employee stock purchase plan
23,452 
 
23,452 
 
 
Employee stock purchase plan (in shares)
 
4,773 
 
 
 
Share-based compensation
278,290 
 
278,290 
 
 
Other comprehensive income (loss)
38,930 
 
 
38,930 
 
Net income (loss)
134,308 
 
 
 
134,308 
Balance at end of period at Dec. 29, 2013
33,961,563 
2,580 
35,275,255 
(245,364)
(1,070,908)
Balance at end of period (in shares) at Dec. 29, 2013
 
26,049,578 
 
 
 
Issuance of restricted shares (in shares)
 
91,966 
 
 
 
Forfeitures of restricted shares (in shares)
 
(2,735)
 
 
 
Employee stock purchase plan
53,938 
53,936 
 
 
Employee stock purchase plan (in shares)
 
11,015 
 
 
 
Share-based compensation
338,810 
 
338,810 
 
 
Other comprehensive income (loss)
70,208 
 
 
70,208 
 
Net income (loss)
(1,268,497)
 
 
 
(1,268,497)
Balance at end of period at Dec. 28, 2014
33,156,022 
2,582 
35,668,001 
(175,156)
(2,339,405)
Balance at end of period (in shares) at Dec. 28, 2014
26,149,824 
26,149,824 
 
 
 
Issuance of restricted shares (in shares)
 
131,752 
 
 
 
Forfeitures of restricted shares (in shares)
 
(8,587)
 
 
 
Shares effectively repurchased for required employee withholding taxes
(4,443)
 
(4,443)
 
 
Shares effectively repurchased for required employee withholding taxes (in shares)
 
(1,387)
 
 
 
Stock repurchase
(98,252)
(2)
(98,250)
 
 
Stock repurchase (in shares)
 
(24,500)
 
 
 
Stock options exercised
74,999 
74,996 
 
 
Stock options exercised (in shares)
 
30,000 
 
 
 
Employee stock purchase plan
71,615 
71,614 
 
 
Employee stock purchase plan (in shares)
 
21,623 
 
 
 
Share-based compensation
424,414 
 
424,414 
 
 
Other comprehensive income (loss)
(831,511)
 
 
(831,511)
 
Net income (loss)
(16,192,492)
 
 
 
(16,192,492)
Balance at end of period at Dec. 27, 2015
$ 16,600,352 
$ 2,584 
$ 36,136,332 
$ (1,006,667)
$ (18,531,897)
Balance at end of period (in shares) at Dec. 27, 2015
26,298,725 
26,298,725 
 
 
 
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Cash flows from operating activities
 
 
 
Net income (loss)
$ (16,192,492)
$ (1,268,497)
$ 134,308 
Adjustments to reconcile net income (loss) to net cash provided by operating activities
 
 
 
Depreciation and amortization
16,582,236 
10,956,951 
7,974,481 
Amortization and write-off of debt discount and loan fees
240,036 
331,650 
76,407 
Realized gain on sale leaseback
(157,208)
Realized loss on investments
33,406 
Impairment and loss on asset disposals
14,242,705 
1,023,144 
98,162 
Share-based compensation
424,414 
338,810 
278,290 
Deferred income taxes
(9,986,007)
(1,834,048)
(336,223)
Changes in operating assets and liabilities that provided (used) cash
 
 
 
Accounts receivable
796,568 
(168,570)
(1,000,537)
Inventory
(207,329)
(264,148)
(208,542)
Prepaid assets
(1,220,714)
157,429 
(107,715)
Intangible assets
(86,907)
(123,345)
(660,966)
Other long-term assets
(846,573)
(184,136)
(3,523)
Accounts payable
3,291,684 
1,470,923 
(497,999)
Accrued liabilities
2,775,105 
1,123,372 
208,742 
Deferred rent
(206,934)
(297,688)
1,226,086 
Net cash provided by operating activities
9,448,584 
11,295,253 
7,180,971 
Cash flows from investing activities
 
 
 
Purchases of investments
(7,469,555)
(13,883,671)
Proceeds from sale of investments
2,952,302 
13,111,935 
5,278,048 
Purchases of property and equipment
(32,502,997)
(38,988,376)
(25,345,370)
Acquisition of business, net of cash acquired
(54,041,489)
(3,202,750)
Proceeds from sale leaseback transaction
5,565,808 
19,079,401 
Net cash used in investing activities
(78,026,376)
(17,469,345)
(33,950,993)
Cash flows from financing activities
 
 
 
Proceeds from issuance of long-term debt
72,963,858 
84,008,979 
61,743,866 
Repayments of long-term debt
(8,166,667)
(68,513,901)
(60,117,830)
Payment of loan fees
(751,071)
(249,116)
Proceeds from employee stock purchase plan
71,615 
53,938 
23,452 
Repurchase of stock
(98,252)
Stock options exercised
74,999 
Tax withholding for restricted stock units
(4,443)
Proceeds from sale of common stock, net of underwriter fees
31,982,679 
Net cash provided by financing activities
64,090,039 
15,299,900 
33,632,167 
Net increase (decrease) in cash and cash equivalents
(4,487,753)
9,125,808 
6,862,145 
Cash and cash equivalents, beginning of period
18,688,281 
9,562,473 
2,700,328 
Cash and cash equivalents, end of period
$ 14,200,528 
$ 18,688,281 
$ 9,562,473 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Nature of Business
 
Diversified Restaurant Holdings, Inc. (“DRH”) is a fast-growing restaurant company operating two complementary concepts:  Buffalo Wild Wings ® Grill & Bar (“BWW”) and Bagger Dave’s Burger Tavern ®  (“Bagger Dave’s”).  As the largest franchisee of BWW and as the creator, developer, and operator of Bagger Dave’s, we provide a unique guest experience in a casual and inviting environment.    We were incorporated in 2006 and are headquartered in the Detroit metropolitan area.  As of December 27, 2015 we had 80 restaurants in Florida, Illinois, Indiana, Michigan, Missouri and Ohio.
 
In 2008, DRH became publicly-owned completing a self-underwritten initial public offering for $735,000 and 140,000 shares. We subsequently completed an underwritten, follow-on offering on April 23, 2013 of 6.9 million shares with net proceeds of $31.9 million.
 
DRH and its wholly-owned subsidiaries (collectively, the “Company”), AMC Group, Inc. (“AMC”), AMC Wings, Inc. (“WINGS”), AMC Burgers, Inc. (“BURGERS”), and AMC Real Estate, Inc. (“REAL ESTATE”) own and operate Bagger Dave's and DRH-owned BWW restaurants located throughout Florida, Illinois, Indiana, Michigan and Missouri.

DRH is the largest BWW franchisee and currently operates 62 DRH-owned BWW restaurants (20 in Michigan, 15 in both Florida and Missouri, seven in Illinois and five in Indiana), including the nation’s largest BWW, based on square footage, in downtown Detroit, Michigan. We remain on track to fulfill our area development agreement (“ADA”) with Buffalo Wild Wings International, Inc. ("BWLD") and expect to operate 77 DRH-owned BWW restaurants by the end of 2020, exclusive of potential additional BWW restaurant acquisitions. In 2014, DRH was awarded the Franchisee of the Year and our COO received the Founder’s Award by BWLD.
 
DRH originated the Bagger Dave’s concept with our first restaurant opening in January 2008 in Berkley, Michigan.  Currently, there are 18 Bagger Dave’s restaurants, 16 in Michigan and one in both Indiana and Ohio.
 
The following organizational chart outlines the current corporate structure of DRH.  A brief textual description of the entities follows the organizational chart. DRH is incorporated in Nevada.
AMC was formed on March 28, 2007 and serves as our operational and administrative center. AMC renders management, operational support, and advertising services to WINGS, BURGERS, REAL ESTATE and their subsidiaries. Services rendered by AMC include marketing, restaurant operations, restaurant management consultation, hiring and training of management and staff, and other management services reasonably required in the ordinary course of restaurant operations.
 
BURGERS was formed on March 12, 2007 and serves as a holding company for our Bagger Dave’s restaurants.  Bagger Dave’s Franchising Corporation, a subsidiary of BURGERS, was formed to act as the franchisor for the Bagger Dave’s concept and has rights to franchise in Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, and Wisconsin.  We do not intend to pursue franchise development at this time.  
 
WINGS was formed on March 12, 2007 and serves as a holding company for our DRH-owned BWW restaurants.  We are economically dependent on retaining our franchise rights with BWLD.  The franchise agreements have specific initial term expiration dates ranging from December 2020 through December 2035, depending on the date each was executed and the duration of its initial term.  The franchise agreements are renewable at the option of the franchisor and are generally renewable if the franchisee has complied with the franchise agreement.  When factoring in any applicable renewals, the franchise agreements have specific expiration dates ranging from December 2025 through December 2050.  We believe we are in compliance with the terms of these agreements.   
 
REAL ESTATE was formed on March 18, 2013, and serves as the holding company for the real estate properties owned by DRH. Currently, DRH owns one property. Due to the closure of the restaurant in 2015, DRH will be selling this property in fiscal 2016. Refer to Note 4 for additional information on restaurant closures. DRH also owned two Bagger Dave’s restaurants, which were sold as part of the sale leaseback transaction that occurred in Second Quarter and Third Quarter of 2015. Refer to Note 2 for additional information on the sale leaseback transactions.
 
We follow accounting standards set by the Financial Accounting Standards Board ("FASB"). The FASB sets generally accepted accounting principles in the United States of America ("GAAP") that we follow to ensure we consistently report our financial condition, results of operations, and cash flows. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification ("ASC").

Principles of Consolidation
 
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated.
 
Fiscal Year
 
The Company utilizes a 52- or 53-week accounting period that ends on the last Sunday in December. Fiscal year 2015 ended on December 27, 2015, fiscal year 2014 ended on December 28, 2014, and fiscal year 2013 ended December 29, 2013. Each fiscal year was comprised of 52 weeks.
 
Segment Reporting
 
The Company has two operating segments, BWW and Bagger Dave’s. The brands operate within the ultra-casual, full-service dining industry, providing similar products to similar customers. The brands also possess similar economic characteristics, resulting in similar long-term expected financial performance. Sales from external customers are derived principally from food and beverage sales. We do not rely on any major customers as a source of sales. We believe we meet the criteria for aggregating our operating segments into a single reporting segment.
 
Cash and Cash Equivalents
 
Cash and cash equivalents consist of cash on hand and demand deposits in banks. The Company considers all highly-liquid investments purchased with original maturities of three months or less to be cash and cash equivalents. The Company, at times throughout the year, may, in the ordinary course of business, maintain cash balances in excess of federally-insured limits. Management does not believe the Company is exposed to any unusual risks on such deposits.
 
Investments
 
The Company’s investment securities are classified as available-for-sale. Investments classified as available-for-sale are available to be sold in the future in response to the Company’s liquidity needs, changes in market interest rates, tax strategies, and asset-liability management strategies, among other reasons. Available-for-sale securities are reported at fair value, with unrealized gains and losses, net of taxes, reported in the accumulated other comprehensive income (loss) component of stockholders’ equity, and accordingly, have no effect on net income. Realized gains or losses on sale of investments are determined on the basis of specific costs of the investments. Dividend income is recognized when declared and interest income is recognized when earned. Discount or premium on debt securities purchased at other than par value are amortized using the effective yield method. See Note 5 for details. 
 
Accounts Receivable 
 
Accounts receivable primarily consist of contractually determined receivables for leasehold improvements and are stated at the amount management expects to collect. Balances that are outstanding after management has used reasonable collection efforts are written off with a corresponding charge to bad debt expense or deferred rent as applicable.  There was no allowance for doubtful accounts necessary at December 27, 2015 and December 28, 2014.
 
Gift Cards
 
Buffalo Wild Wings

The Company records gift cards under a BWLD system-wide program.  Gift cards sold are recorded as a gift card liability.  When redeemed, the gift card liability account is offset by recording the transaction as revenue.  At times, gift card redemptions can exceed amounts due to BWLD for gift card purchases resulting in an asset balance.  Under this centralized system, any breakage would be recorded by Blazin Wings, Inc., a subsidiary of BWLD, and is subject to the breakage laws in the state of Minnesota, where Blazin Wings, Inc. is located.
 
Bagger Dave’s

The Company records Bagger Dave's gift card sales as a gift card liability when sold.  When redeemed, the gift card liability account is offset by recording the transaction as revenue.  Michigan law states that gift cards cannot expire and any post-sale fees cannot be assessed until 5 years after the date of gift card purchase by the consumer. There is no breakage attributable to Bagger Dave's restaurants for the Company to record as of December 27, 2015 and December 28, 2014.

The Company's net gift card asset/liability was a liability of $136,874 and $10,706 as of December 27, 2015 and December 28, 2014, respectively.
 
Inventory
 
Inventory consists mainly of food and beverage products and is accounted for at the lower of cost or market using the first in, first out method of inventory valuation. Cash flows related to inventory sales are classified in net cash used by operating activities in the Consolidated Statements of Cash Flows.
 
Prepaids and Other Long-Term Assets
 
Prepaid assets consist principally of prepaid rent, insurance and contracts and are recognized ratably as operating expense over the period of future benefit. Other assets consist primarily of security deposits for operating leases and utilities.
 
Property and Equipment
 
Property and equipment are recorded at cost. Buildings are depreciated using the straight-line method over the estimated useful life, which is typically 39 years. Equipment and furniture and fixtures are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements, which include the cost of improvements funded by landlord incentives or allowances, are amortized using the straight-line method over the lesser of the term of the lease, with consideration of renewal options if renewals are reasonably assured because failure to renew would result in an economic penalty, or the estimated useful lives of the assets, which is typically five - 15 years. Maintenance and repairs are expensed as incurred. Upon retirement or disposal of assets, the cost and accumulated depreciation are eliminated from the respective accounts and the related gains or losses are credited or charged to earnings.
 
The Company capitalizes items associated with construction but not yet placed into service, known as construction in progress (“CIP”). Items capitalized include fees associated with the design, build out, furnishing of the restaurants, leasehold improvements, construction period interest (when applicable), equipment, and furniture and fixtures. Restaurant CIP is not amortized or depreciated until the related assets are placed into service. Items are placed into service according to their asset category when the restaurant is open for service.
  
Intangible Assets
 
Amortizable intangible assets consist of franchise fees, trademarks, non-compete agreements, favorable and unfavorable operating leases, and loan fees and are stated at cost, less accumulated amortization. Intangible assets are amortized on a straight-line basis over the estimated useful life, as follows: Franchise fees- 1020 years, Trademarks- 15 years, Non-compete- 3 years, Favorable and unfavorable leases- over the term of the respective leases and Loan fees- over the term of the respective loan.
  
Impairment or Disposal of Long-Lived Assets

We review long-lived assets quarterly to determine if triggering events have occurred which would require a test to determine if the carrying amount of these assets may not be recoverable based on estimated future cash flows. Assets are reviewed at the lowest level for which cash flows can be identified, which is at the individual restaurant level. In the absence of extraordinary circumstances, restaurants are included in the impairment analysis after they have been open for two years. We evaluate the recoverability of a restaurant’s long-lived assets, including buildings, intangibles, leasehold improvements, furniture, fixtures, and equipment over the remaining life of the primary asset in the asset group, after considering the potential impact of planned operational improvements, marketing programs, and anticipated changes in the trade area. In determining future cash flows, significant estimates are made by management with respect to future operating results for each restaurant over the remaining life of the primary asset in the asset group. If assets are determined to be impaired, the impairment charge is measured by calculating the amount by which the asset carrying amount exceeds its fair value based on our estimate of discounted future cash flows. The determination of asset fair value is also subject to significant judgment. Refer to Note 4 for additional information.

We account for exit or disposal activities, including restaurant closures, in accordance with ASC Topic 420, Exit or Disposal Cost Obligations. Such costs include the cost of disposing of the assets as well as other facility-related expenses from previously closed restaurants. These costs are generally expensed as incurred. Additionally, at the date we cease using a property under an operating lease, we record a liability for the net present value of any remaining lease obligations, net of estimated sublease income. Any subsequent adjustments to that liability as a result of lease termination or changes in estimates of sublease income are recorded in the period incurred. Refer to Note 4 for additional information.

Indefinite-Lived Intangible Assets

Liquor licenses also a component of intangible assets, are deemed to have an indefinite life and, accordingly, are not amortized. Management reviews liquor license assets on an annual basis (at year-end) to determine whether carrying values have been impaired. We identify potential impairments for liquor licenses by comparing the fair value with its carrying amount. If the fair value exceeds the carrying amount, the liquor licenses are not impaired. If the carrying amount exceeds the fair value, an impairment loss is recorded for the difference.  If the fair value of the asset is less than the carrying amount, an impairment is recorded. No impairments were recognized in fiscal 2015, 2014 or 2013.

Goodwill
 
Goodwill is not amortized and represents the excess of cost over the fair value of identified net assets of businesses acquired. Goodwill is subject to an annual impairment analysis or more frequently if indicators of impairment exist. At December 27, 2015 and December 28, 2014, we had goodwill of $50.1 million and $11.0 million that was assigned to our Buffalo Wild Wings reporting unit.
 
The impairment analysis, if necessary, consists of a two-step process. The first step is to compare the fair value of the reporting unit to its carrying value, including goodwill. We estimate fair value using market information (market approach) and discounted cash flow projections (income approach). The income approach uses the reporting unit’s projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects market conditions. The projection uses management’s best estimates of projected revenue, costs and cash expenditures, including an estimate of new restaurant openings and related capital expenditures. Other significant estimates also include terminal growth rates and working capital requirements. We supplement our estimate of fair value under the income approach by using a market approach which estimates fair value by applying multiples to the reporting unit’s projected operating performance. The multiples are derived from comparable publicly traded companies with similar characteristics to the reporting unit. If the fair value of the reporting unit is less than its carrying value, the second step of the impairment analysis must be performed in order to determine the amount of impairment loss, if any. The second step compares the implied fair value of goodwill with the carrying amount of that goodwill. If the carrying amount of the goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess. All goodwill was considered recoverable as of December 27, 2015 and December 28, 2014 based on our quantitative analysis.  
 
Deferred Rent
 
Certain operating leases provide for minimum annual payments that increase over the life of the lease. Typically, our operating leases contain renewal options under which we may extend the initial lease terms for periods of five to 10 years. The aggregate minimum annual payments are expensed on a straight-line basis commencing at the start of our construction period and extending over the term of the related lease, including option renewals as deemed reasonably assured. The amount by which straight-line rent exceeds actual lease payment requirements in the early years of the lease is accrued as deferred rent liability and reduced in later years when the actual cash payment requirements exceed the straight-line expense. The Company also accounts, in its straight-line computation, for the effect of any "rental holidays", "free rent periods", and "landlord incentives or allowances".
 
Deferred Gains
 
Deferred gains on the sale leaseback transaction described in Note 2, are recognized into income over the life of the related operating lease agreements.
 
Revenue Recognition
 
Revenues from food and beverage sales are recognized and generally collected at the point of sale. All sales taxes are presented on a net basis and are excluded from revenue.
  
Advertising
 
Advertising expenses associated with contributions to the BWLD advertising fund (3.0% of net sales globally plus an additional 0.25% or 0.5% of net sales for certain metropolitan cities) are expensed as contributed and all other advertising expenses are expensed as incurred. Advertising expenses of $3.4 million, $2.3 million and $0.5 million are included in general and administrative expenses in the Consolidated Statements of Operations and advertising expense of $4.6 million, $3.5 million and $2.8 million are included in other operating costs in the Consolidated Statements of Operations for the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively.
  
Pre-opening Costs
 
Pre-opening costs are those costs associated with opening new restaurants and will vary based on the number of new locations opening and under construction. The Company also reclassifies labor costs that exceed the historical average for the first three months of restaurant operations that are attributable to training. These costs are expensed as incurred. Pre-opening costs were $3.2 million, $3.5 million, and $3.2 million for the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively. Excess labor cost incurred after restaurant opening and included in pre-opening cost were approximately $903,000, $516,000 and $1.1 million for the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively.
 
Income Taxes
 
Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.
 
The Company applies the provisions of FASB ASC 740, Income Taxes, (“ASC 740”) regarding the accounting for uncertainty in income taxes. The Company classifies all interest and penalties as income tax expense. There are no accrued interest amounts or penalties related to uncertain tax positions as of December 27, 2015 and December 28, 2014.

Earnings Per Common Share
 
Earnings per share are calculated under the provisions of FASB ASC 260, Earnings per Share, which requires a dual presentation of "basic" and "diluted" earnings per share on the face of the Consolidated Statements of Operations. Basic earnings per common share excludes dilution and is computed by dividing the net earnings available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share include dilutive common stock equivalents consisting of stock options determined by the treasury stock method. Restricted stock awards contain nonforfeitable rights to dividends, making such awards participating securities.  The calculation of basic and diluted earnings per share uses an earnings allocation method to consider the impact of restricted stock.  
 
Stock Based Compensation
 
The Company estimates the fair value of stock option awards utilizing the Black-Scholes pricing model.  The fair value of the awards is amortized as compensation expense on a straight-line basis over the requisite service period of the award, which is generally the vesting period.  The fair value of restricted shares is equal to the number of restricted shares issued times the Company’s stock price on the date of grant and is amortized as compensation expense on a straight-line basis over the service period of the award.
  
Concentration Risks
 
Approximately 79.9%, 79.1%, and 80.9% of the Company's revenues for the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively, were generated from food and beverage sales from restaurants located in the Midwest region.
 
Use of Estimates
 
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
 
Interest Rate Swap Agreements
 
The Company utilizes interest rate swap agreements with Citizens Bank, N.A. (“Citizens”) to fix interest rates on a portion of the Company’s portfolio of variable rate debt, which reduces exposure to interest rate fluctuations.  Our derivative financial instruments are recorded at fair value on the Consolidated Balance Sheets. The effective portion of changes in the fair value of derivatives which qualify for hedge accounting is recorded in other comprehensive income and is recognized in the Consolidated Statements of Operations when the hedged item affects earnings. Ineffective portion of the change in fair value of a hedge would be recognized in income immediately. The Company does not use any other types of derivative financial instruments to hedge such exposures, nor does it use derivatives for speculative purposes.  
 
The interest rate swap agreements associated with the Company’s current debt agreements qualify for hedge accounting. As such, the Company records the change in the fair value of its swap agreements as a component of accumulated other comprehensive income (loss), net of tax. The Company records the fair value of its interest swaps on the Consolidated Balance Sheets in other long-term assets or other liabilities depending on the fair value of the swaps. See Note 10 and Note 17 for additional information on the interest rate swap agreements.
 
Recent Accounting Pronouncements
 
In February 2016, FASB issued ASU 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in a lessee recognizing a lease asset and liability. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact of the updated guidance on our consolidated financial statements.
 
In November 2015, the FASB issued ASU 2015-17, Topic 740: Balance Sheet Classification of Deferred Taxes (“ASU No. 2015-17”), which simplifies the presentation of deferred income taxes. ASU No. 2015-17 provides presentation requirements to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The Company adopted this standard as of December 27, 2015, with prospective application. The adoption of ASU No. 2015-17 had no impact on the Company’s Consolidated Statements of Operations and Comprehensive Income.

In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest, which updates guidance on the presentation of debt issuance costs. The guidance requires debt issuance costs to be presented as a direct deduction of debt balances on the statement of financial position, similar to the presentation of debt discounts. The guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. We will comply with this guidance in fiscal year 2016. We do not expect the standard will have a significant impact on our consolidated financial statements.  

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP.  The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein.  We are currently evaluating the impact of our pending adoption of ASU 2014-09, although based on the nature of our business we do not expect the standard will have a significant impact on our consolidated financial statements.  
 
We reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to our operations or that no material effect is expected on our consolidated financial statements as a result of future adoption.
SIGNIFICANT BUSINESS TRANSACTIONS
SIGNIFICANT BUSINESS TRANSACTIONS
SIGNIFICANT BUSINESS TRANSACTIONS
 
2013 follow-on offering

On April 23, 2013, the Company completed an underwritten, follow-on equity offering of 6.9 million shares of common stock at a price of $5.00 per share to the public. After deducting underwriting discounts, commissions, and other offering expenses, the net proceeds to DRH from the offering were $31.9 million. Refer to our Form S-1/A filed on April 15, 2013 for additional information.
 
Sale leaseback transactions

On October 6, 2014, the Company entered into a sale leaseback agreement for $24.6 million with a third-party Real Estate Investment Trust (“REIT”). The arrangement includes the sale of 12 properties, six Bagger Dave’s locations and six BWW locations. In Q4 2014, we closed on ten of the 12 properties, with total proceeds of $19.1 million.  In connection with the closing of the sale-leaseback transactions in Q4 2014, the Company recorded losses of approximately $0.5 million, which is included in loss on disposal of property and equipment on the Consolidated Statements of Operations. The Company also recorded deferred gains of $2.3 million for the properties sold at a gain as of December 28, 2014. We closed on the two remaining properties in June 2015 and August 2015. We received total proceeds of $5.6 million and recorded losses of $0.4 million, which is recorded in impairment and loss on asset disposals on the Consolidated Statements of Operations. In pursuant to the terms of each sale-leaseback transaction, we transferred title of the real property to the purchaser after final inspection and, in turn, entered into separate leases with the purchaser having a 15-year basic operating lease term plus four separate 5-year renewal options. At December 27, 2015, $0.2 million of the deferred gain was recorded in other accrued liabilities and $2.0 million of the deferred gain was recorded in other liabilities on the Consolidated Balance Sheets. The gains will be recognized into income as an offset to rent expense over the life of the related lease agreements. See Notes 6 and 13 for additional information.
ACQUISITIONS
ACQUISITIONS
ACQUISITIONS
 
Florida – June 30, 2014
 
On June 30, 2014, the Company completed the acquisition of substantially all of the assets of Screamin’ Hot Florida, LLC and Screamin’ Hot Trinity, LLC, each a Florida limited liability company. The assets consist of three BWW restaurants in Clearwater, Port Richey and Oldsmar, Florida (collectively, the “Florida 2014 Acquisition”). The purchase price was $3.2 million in cash, subject to working capital adjustment, and one-half of the transfer fees imposed by BWLD under its franchise agreements for Florida 2014 Acquisition. After the acquisition, the Company owns the entire Tampa, FL BWW market, giving DRH control of the local Advertising Co-Op. This ownership provides DRH a unique opportunity to gain local market scale, in addition to providing greater geographic diversity to the Company’s restaurant portfolio.
 
The following table summarizes the estimated fair values of net assets acquired and liabilities assumed:
 
Working capital
$
57,600

Property and equipment
656,146

Franchise fees
72,750

Goodwill
2,419,854

Net Cash paid for acquisition
$
3,206,350


 
The excess of the purchase price over the aggregate fair value of assets acquired is allocated to goodwill, which will be deductible for tax purposes. The results of operations of these locations are included in our Consolidated Statements of Operations from the date of acquisition. The Company found it impracticable to report the supplemental pro forma information for the Florida 2014 Acquisition due to the lack of available information.
 
The results of operations from the acquisition are included in the Company's results beginning June 30, 2014. The actual amounts of revenue and operating loss included in the accompanying Consolidated Statements of Operations for the year ended December 28, 2014 are $3.1 million and $135,796, respectively.
 
St. Louis - June 29, 2015

On June 29, 2015, the Company, completed the acquisition of substantially all of the assets of A Sure Wing, LLC, a Missouri limited liability company (“ASW”). The assets acquired consist primarily of 18 existing BWW restaurants, 15 in Missouri and three in Illinois. As consideration for the acquisition of the assets, the Company paid $54.0 million in cash at closing, subject to adjustment for cash on hand, inventory and certain prorated items. Seller reimbursed the Company for one-half of all fees imposed by BWLD under its franchise agreements for the transfer of these restaurants. The acquisition provides greater geographic diversity to the Company’s restaurant portfolio.

The following table summarizes the estimated fair values of net assets acquired and liabilities assumed:

Working capital
$
413,232

Fixed assets
13,993,000

Intangible assets
505,000

Favorable lease
112,344

Unfavorable lease
(58,797
)
Goodwill
39,098,451

Net Cash paid for acquisition
$
54,063,230



The excess of the purchase price over the aggregate fair value of assets acquired is allocated to goodwill, which will be deductible for tax purposes. The results of operations of these locations are included in our Consolidated Statements of Operations from the date of acquisition.

The following table summarizes the unaudited pro forma financial information as if the acquisition had occurred at the beginning of the periods presented:

 
 
Fiscal Years Ended
 
 
December 27, 2015
 
December 28, 2014
Revenue
 
$
193,481,326

 
$
168,221,665

Net income (loss)
 
(15,250,523
)
 
684,575

Basic earnings (loss) per share
 
(0.58
)
 
0.03

Diluted earnings (loss) per share
 
(0.58
)
 
0.03



The results of operations from the acquisition are included in the Company's results beginning June 29, 2015. The actual amounts of revenue and net income that are included in the accompanying Consolidated Statements of Operations for the period of June 29, 2015 to December 27, 2015 is $20.9 million and $25,095, respectively. For additional information pertaining to the ASW acquisition refer to the 8-K/a filed on September 3, 2015.
IMPAIRMENTS, DISPOSALS AND EXIT COSTS
IMPAIRMENTS, DISPOSALS AND EXIT COSTS
IMPAIRMENTS, DISPOSALS AND EXIT COSTS

During 2015, the Company decided to close 12 underperforming locations, eight in Indiana, three in Michigan and one in Florida (the “ 2015 Restaurant Closures”). The Company closed these restaurants during the third and fourth quarters of 2015. In connection with the 2015 Restaurant Closures, the Company recorded expenses of $10.9 million, including property and equipment impairment charges, exit costs associated with lease obligations, employee terminations and other closure related obligations. The Company expects to incur minimal charges in fiscal 2016 related to these closures.

The following table summarizes the Company’s accrual activity related to facility closure and other costs, primarily associated with the 2015 Restaurant Closures during the fiscal year ended December 27, 2015:
 
 
Fiscal
 
 
2015
Beginning of the year
 
$

Charges
 
1,414,308

Cash payments
 
(75,122
)
End of the year
 
$
1,339,186


At December 27, 2015, $0.9 million of fixed and intangible assets for the closed locations are held for sale, which is recorded in Property and equipment on the Consolidated Balance Sheets. We anticipate auctioning the assets held for sale in First Quarter 2016.

Based on impairment indicators that existed at December 27, 2015, the Company performed an impairment analysis on its long-lived assets subject to amortization and recorded a fixed asset impairment of $2.8 million related to four underperforming Bagger Dave's locations. The impairment charge was recorded to the extent that the carrying amount of the assets were not considered recoverable based on the estimated discounted cash flows and the underlying fair value of the assets, which was recorded in impairment and loss on asset disposals on the Consolidated Statements of Operations for 2015. For fiscal years ended December 28, 2014 and December 29, 2013, no impairment losses were recognized.

The following is a summary of the expenses recognized in the Consolidated Statement of Operations during the year ended December 27, 2015 related to the restaurant closures and impairment of property and equipment:
 
 
Location in the Consolidated statement of Operations
 
Fiscal
Description
 
 
2015
Property and equipment impairments
 
Impairment and loss on asset disposals
 
$
12,778,155

Facility closure and other expenses
 
Occupancy costs
 
733,834

Severance expense
 
Compensation costs
 
154,764

 
 
 
 
$
13,666,753


During 2015, 2014 and 2013, the Company recorded other asset disposal losses of $1.5 million, $1.0 million and $.1 million, respectively.

We are currently monitoring several restaurants in regards to the valuation of long-lived assets and have developed plans to continue improvement of operating results. As we periodically refine our estimated future operating results, changes in our estimates and assumptions may cause us to realize impairment charges in the future that could be material.
INVESTMENTS
INVESTMENTS
INVESTMENTS
 
Investments consist of available-for-sale securities that are carried at fair value. Available-for-sale securities are classified as current assets based upon our intent and ability to use any and all of the securities as necessary to satisfy the operational requirements of our business. Based on the call date of the investments, all securities have maturities of one year or less. Unrealized losses are charged against net earnings when a decline in fair value is determined to be other than temporary. In the First Quarter 2015, DRH opted to discontinue investing in debt securities and determined investing in a highly liquid money market account was a better fit for the Company's liquidity needs. As of December 27, 2015, the outstanding investments held at December 28, 2014 had fully matured and have been redeemed.
 
The amortized cost, gross unrealized holding gains, gross unrealized holding loss, and fair value of available-for-sale securities by type are as follows: 
 
 
 
December 28, 2014
 
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Loss
 
Estimated
Fair Value
Debt securities:
 
 
 
 
 
 
 
 
Obligations of states/municipals
 
$
1,190,261

 
$

 
$
(4,278
)
 
$
1,185,983

Corporate securities
 
1,732,734

 

 
(1,485
)
 
1,731,249

Total debt securities
 
$
2,922,995

 
$

 
$
(5,763
)
 
$
2,917,232

 

Gross unrealized gains and losses on available-for-sale securities, recorded in accumulated other comprehensive loss were as follows:
 
 
 
December 28, 2014
 
December 29, 2013
Unrealized gain
 
$

 
$
236

Unrealized loss
 
(5,763
)
 
(44,442
)
Net unrealized loss
 
(5,763
)
 
(44,206
)
Deferred federal income tax benefit
 
1,959

 
15,030

Net unrealized loss on investments, net of deferred income tax
 
$
(3,804
)
 
$
(29,176
)
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET
 
Property and equipment are comprised of the following:
 
 
 
December 27, 2015
 
December 28, 2014
Land
 
$
37,500

 
$
3,087,514

Building
 
2,339,219

 
2,339,219

Equipment
 
32,912,992

 
29,251,119

Furniture and fixtures
 
8,194,060

 
7,458,292

Leasehold improvements
 
72,148,545

 
56,971,815

Restaurant construction in progress
 
1,768,027

 
4,731,045

Total
 
117,400,343

 
103,839,004

Less accumulated depreciation
 
(38,210,682
)
 
(32,330,054
)
Property and equipment, net
 
$
79,189,661

 
$
71,508,950


 
Depreciation expense was $16.6 million, $10.9 million, and $7.9 million during the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively.
 
At December 28, 2014, approximately $2.2 million of our restaurant construction in progress was subject to the sale leaseback transaction described in Note 2.
INTANGIBLE ASSETS
INTANGIBLE ASSETS
INTANGIBLE ASSETS
 
Intangible assets are comprised of the following:
 
 
 
December 27, 2015
 
December 28, 2014
Amortized intangible assets
 
 
 
 
Franchise fees
 
$
1,278,142

 
$
647,363

Trademark
 
66,826

 
64,934

Non-compete
 
76,560

 
76,560

Favorable operating leases
 
351,344

 
239,000

Loan fees
 
751,070

 
130,377

Total
 
2,523,942

 
1,158,234

 
 
 
 
 
Less accumulated amortization
 
(557,527
)
 
(377,839
)
Amortized intangible assets, net
 
1,966,415

 
780,395

 
 
 
 
 
Unamortized intangible assets
 
 
 
 
Liquor licenses
 
2,017,618

 
2,136,103

Total intangible assets, net
 
$
3,984,033

 
$
2,916,498


  
Amortization expense for the years ended December 27, 2015, December 28, 2014 and December 29, 2013 was $102,736, $62,008 and $55,469, respectively. Amortization of favorable/unfavorable leases and loan fees are reflected as part of occupancy and interest expense, respectively. Loan fees written off to interest expense during the years ended December 27, 2015, December 28, 2014 and December 29, 2013 were $117,339, $308,497 and $76,407, respectively. 

Based on the current intangible assets and their estimated useful lives, future intangible-related expense for the next five years and thereafter is projected as follows:
 
Year
Amount
2016
$
262,945

2017
261,409

2018
259,734

2019
259,176

2020
182,973

Thereafter
740,178

Total
$
1,966,415


 
The aggregate weighted-average amortization period for intangible assets is 11.3 years.
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITES
 
 
December 27, 2015
 
December 28, 2014
Sales tax payable
 
$
987,795

 
$
770,938

Accrued interest
 
495,365

 
138,538

Closure liability - current
 
1,008,707

 

Other
 
1,171,344

 
448,034

Total accrued other liabilities
 
3,663,211

 
1,357,510

RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
 
Fees for monthly accounting and financial statement services are paid to an entity owned by a member of the DRH Board of Directors and a stockholder of the Company. Fees paid during the years ended December 27, 2015, December 28, 2014 and December 29, 2013 were $596,856, $515,948 and $405,187, respectively. As of December 27, 2015 and December 28, 2014, we had unpaid fees of $14,631 and $900, respectively.
 
See Note 13 for related party operating lease transactions.
LONG-TERM DEBT
LONG-TERM DEBT
LONG-TERM DEBT
 
Long-term debt consists of the following obligations:  
 
 
 
December 27, 2015
 
December 28, 2014
Note payable - $120.0 million term loan; payable to Citizens with a senior lien on all the Company’s personal property and fixtures. Scheduled monthly principal payments are approximately $833,333 plus accrued interest through maturity in June 2020. Interest is charged based on one-month LIBOR plus an applicable margin, which ranges from 2.25% to 3.5%, depending on the lease adjusted leverage ratio defined in the terms of the agreement. The rate at December 27, 2015 was approximately 3.86%.
 
$
115,833,333

 
$


 


 
 
Note payable - $30.0 million development line of credit; payable to Citizens with a senior lien on all the Company’s personal property and fixtures. Payments are due monthly once fully drawn and matures in June 2020. Interest is charged based on one-month LIBOR plus an applicable margin, which ranges from 2.25% to 3.5%, depending on the lease adjusted leverage ratio defined in the terms of the agreement. Once fully drawn, payments will be due monthly; the note matures June 2020. The rate at December 27, 2015 was approximately 3.86%.
 
11,090,323

 



 
 
 


Note payable - $56.0 million term loan; payable to Citizens with a senior lien on all the Company’s personal property and fixtures. Scheduled monthly principal payments are approximately $666,667 plus accrued interest through maturity in December 2019. Interest was charged based on one-month LIBOR plus an applicable margin, which ranges from 2.25% to 3.15%, depending on the lease adjusted leverage ratio defined in the terms of the agreement. The rate at December 28, 2014 was approximately 2.7%.
 

 
56,000,000


 
 
 


Note payable - $20.0 million development line of credit; payable to Citizens with a senior lien on all the Company’s personal property and fixtures. Payments are due monthly once fully drawn and matures in December 2019. Interest was charged based on one-month LIBOR plus an applicable margin, which ranges from 2.25% to 3.15%, depending on the lease adjusted leverage ratio defined in the terms of the agreement. The rate at December 28, 2014 was approximately 2.7%.
 

 
5,768,399

 
 
 
 
 
Unamortized discount
 
(322,349
)
 

 
 
 
 
 
Total debt
 
126,601,307

 
61,768,399

 
 
 
 
 
Less current portion
 
(9,918,827
)
 
(8,155,903
)
 
 
 
 
 
Long-term debt, net of current portion
 
$
116,682,480

 
$
53,612,496



On December 16, 2014, the Company entered into a $77.0 million senior secured credit facility with Citizens (the “December 2014 Senior Secured Credit Facility”).  The December 2014 Senior Secured Credit Facility consist of a $56.0 million term loan (the “December 2014 Term Loan”), a $20.0 million development line of credit (the “December 2014 DLOC”), and a $1.0 million revolving line of credit (the “December 2014 RLOC”). The Company used approximately $35.5 million of the December 2014 Term Loan to refinance existing outstanding debt with Citizens and used approximately $20.0 million of the December 2014 Term Loan to refinance and term out the outstanding balance of the existing development line of credit loan between the Company and Citizens.   The remaining balance of the December 2014 Term Loan, approximately $0.5 million, was used to pay the fees, costs, and expenses associated with the closing of the December 2014 Senior Secured Credit Facility.  The December 2014 Term Loan was for a period of five years.  Payments of principal were based upon an 84 months straight-line amortization schedule, with monthly principal payments of $666,667 plus accrued interest.  The interest rate for the December 2014 Term Loan was LIBOR plus an applicable margin, which ranged from 2.25% to 3.15%, depending on the lease adjusted leverage ratio defined in the terms of the agreement.  The entire remaining outstanding principal and accrued interest on the December 2014 Term Loan was due and payable on the maturity date of December 16, 2019.  The December 2014 DLOC was for a term of two years and was convertible upon maturity into a term note based on the terms of the agreement at which time monthly principal payments would be due based on a 84 months straight-line amortization schedule, plus interest, through maturity on December 16, 2014. The December 2014 RLOC was for a term of two years and no amount was outstanding as of December 28, 2014.

In conjunction with the June 29, 2015 acquisition described in Note 3, the Company, entered into a $155.0 million Senior Secured Credit Facility (the “June 2015 Senior Secured Credit Facility”) with Citizens as administrative agent for the Lenders party thereto. The June 2015 Senior Secured Credit Facility consists of a $120.0 million term loan ("June 2015 Term Loan"), a $30.0 million development line of credit ("June 2015 DLOC"), and a $5.0 million revolving line of credit ("June 2015 RLOC"). The Company immediately used approximately $65.5 million of the June 2015 Term Loan to refinance existing outstanding debt and $54.0 million of the June 2015 Term Loan to finance the acquisition. The remaining balance of the June 2015 Term Loan, approximately $0.5 million, was used to pay the fees, costs and expenses arising in connection with the closing of the loans constituting the June 2015 Senior Secured Credit Facility.

The June 2015 Term Loan is for a term of five years. Payments of principal shall be based upon a 12-year straight-line amortization schedule, with monthly principal payments of $833,333 plus accrued interest. The interest rate for the June 2015 Term Loan is LIBOR plus an applicable margin which ranges from 2.25% to 3.5%. The entire remaining outstanding principal and accrued interest on the June 2015 Term Loan is due and payable on June 29, 2020. The June 2015 DLOC is for a term of two years and is convertible upon maturity into a term note based on the terms of the agreement at which time monthly principal payments will be due based on a 12-year straight-line amortization schedule, plus interest at LIBOR plus an applicable margin, through maturity on June 29, 2020. The June 2015 RLOC is for a term of five years and bears interest at LIBOR plus an applicable margin. As of December 27, 2015 no amounts were outstanding. Fees related to the term debt and paid directly to lenders were recorded as debt discount. Debt discount totaled $322,349, net of accumulated amortization at December 27, 2015. Debt issuance costs represents legal, consulting, and financial costs associated with debt financing, which totaled approximately $674,955 at December 27, 2015. Debt discount and debt issuance cost are amortized over the life of the debt and are recorded in interest expense using the effective interest method. The Company’s evaluation of the June 2015 debt refinancing concluded that the terms of the debt were not substantially modified.
 
Based on the long-term debt terms that existed at December 27, 2015, the scheduled principal maturities, net of unamortized discount, for the next five years and thereafter are summarized as follows:
 
 
Amount
2016
$
9,918,827

2017
10,480,330

2018
11,042,033

2019
11,047,760

2020
84,112,357

Thereafter

Total
$
126,601,307


 
Interest expense was $4.2 million, $2.3 million and $1.7 million for the years ended December 27, 2015, December 28, 2014 and December 29, 2013 , respectively.
  
The current debt agreement contains various customary financial covenants generally based on the performance of the specific borrowing entity and other related entities. The more significant covenants consist of a minimum debt service coverage ratio and a maximum lease adjusted leverage ratio. In connection with the August 2015 closure of three locations discussed in Note 4, during the Third Quarter the Company violated one of its non-financial loan covenants related to the number of allowable restaurant closures. In the Third Quarter our primary lender modified our covenants within our debt agreement to allow for the closure of specified locations and one time transaction fees associated with the St. Louis acquisition and the wage-claim settlement, discussed in Note 14. As of December 27, 2015 the Company was in compliance with the loan covenants.

At December 27, 2015, the Company has six interest rate swap agreements to fix a portion of the interest rates on its variable rate debt. The swap agreements all qualify for hedge accounting. Under the swap agreements, the Company receives interest at the one-month LIBOR and pays a fixed rate. Since these swap agreements qualify for hedge accounting, the changes in fair value are recorded in other comprehensive income (loss), net of tax. See Note 1 and Note 17 for additional information pertaining to interest rate swaps.

The following summarizes the fair values of derivative instruments designated as cash flow hedges which were outstanding:

 
 
 
December 27, 2015
 
 
 
Notional amounts
 
Derivative assets
 
Derivative liabilities
Interest rate swaps
Rate
Expires
 
 
 
 
 
April 2012
1.4%
April 2019
$
7,619,048

 
$

 
$
56,280

October 2012
0.9%
October 2017
3,214,286

 

 
3,027

July 2013
1.4%
April 2018
8,190,476

 

 
60,164

May 2014
1.5%
April 2018
11,428,571

 

 
122,716

January 2015
1.8%
December 2019
20,547,619

 

 
415,459

August 2015
2.3%
June 2020
49,696,875

 

 
867,609

Total
 
 
$
100,696,875

 
$

 
$
1,525,255


 
 
 
December 28, 2014
 
 
 
Notional amounts
 
Derivative assets
 
Derivative liabilities
Interest rate swaps
Rate
Expires
 
 
 
 
 
April 2012
1.4%
April 2019
$
9,904,762

 
$

 
$
73,492

October 2012
0.9%
October 2017
4,071,429

 
3,119

 

July 2013
1.4%
April 2018
11,619,048

 

 
106,061

May 2014
1.5%
April 2018
12,857,143

 

 
83,192

Total
 
 
$
38,452,382

 
$
3,119

 
$
262,745

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION
 
The Company established a Stock Incentive Plan in 2011 (“Stock Incentive Plan”) to attract and retain directors, consultants, and team members and to align their interests with the interests of the Company’s shareholders through the opportunity for increased stock ownership.  The plan permits the grant and award of 750,000 shares of common stock by way of stock options and/or restricted stock.  Stock options must be awarded at exercise prices at least equal to or greater than 100.0% of the fair market value of the shares on the date of grant. The options will expire no later than 10 years from the date of grant, with vesting terms to be defined at grant date, ranging from a vesting schedule based on performance to a vesting schedule that extends over a period of time as selected by the Compensation Committee of the Board of Directors (the “Committee”) or another committee as determined by the Board of Directors. The Committee also determines the grant, issuance, retention, and vesting timing and conditions of awards of restricted stock. The Committee may place limitations, such as continued employment, passage of time, and/or performance measures, on restricted stock. Awards of restricted stock may not provide for vesting or settlement in full of restricted stock over a period of less than one year from the date the award is made.

Restricted stock awards

During fiscal 20152014, and 2013, restricted shares were issued to certain team members at a weighted-average grant date fair value of $3.56, $4.82, and $5.85, respectively.  Restricted shares are generally granted with a per share purchase price at 100.0% of the fair market value on the date of grant. Based on the Stock Award Agreement, shares vest ratably over a three or one year period or upon the three years anniversary of the granted shares, the vesting terms are determined by the Committee.   Unrecognized stock-based compensation expense of $559,509 at December 27, 2015 will be recognized over the remaining weighted-average vesting period of 1.9 years. The total fair value of shares vested during years ended December 27, 2015December 28, 2014, and December 29, 2013 was $197,045, $193,996, and $169,593, respectively.  Under the Stock Incentive Plan, there are 365,051 shares available for future awards at December 27, 2015.
 
The following table presents the restricted stock transactions for fiscal 2015:
 
 
Number of
Restricted
Stock Shares
Unvested, December 28, 2014
164,867

Granted
131,752

Vested
(45,521
)
Vested shares tax portion
(1,387
)
Forfeited
(8,587
)
Unvested, December 27, 2015
241,124


The following table presents the restricted stock transactions for fiscal 2014:
 
 
Number of
Restricted
Stock Shares
Unvested, December 29, 2013
116,667

Granted
91,966

Vested
(41,031
)
Forfeited
(2,735
)
Unvested, December 28, 2014
164,867

 
The following table presents the restricted stock transactions for fiscal 2013:
 
 
Number of
Restricted
Stock Shares
Unvested, December 30, 2012
54,900

Granted
145,575

Vested
(26,700
)
Forfeited
(57,108
)
Unvested, December 29, 2013
116,667


 
On July 30, 2007, DRH granted options for the purchase of 150,000 shares of common stock to the directors of the Company at an exercise price of $2.50 per share. These options vested ratably over a three year period and were set to expire six years from issuance, July 30, 2013. At December 29, 2013, all 150,000 options were fully vested and were exercised either through cash or cashless exercise at a price of $2.50 per share. The intrinsic value of options exercised in 2013 was $679,680
 
On July 30, 2010, prior to the Stock Incentive Plan, DRH granted options for the purchase of 210,000 shares of common stock to the directors of the Company.  These options are fully vested and expire six years from issuance, July 30, 2016.  Once vested, the options can be exercised at a price of $2.50 per share. On August 13, 2015, 30,000 shares were exercised at a price of $2.50 per share. The intrinsic value of options exercised were $6,300. At December 27, 2015, 180,000 shares of authorized common stock are reserved for issuance to provide for the exercise of these options. The intrinsic value of outstanding options was $19,800, $522,900, and $514,500 as of December 27, 2015, December 28, 2014 and December 29, 2013, respectively.

Employee stock purchase plan

The Company also reserved 250,000 shares of common stock for issuance under the Employee Stock Purchase Plan (“ESPP”). The ESPP is available to team members subject to employment eligibility requirements. Participants may purchase common stock at 85.0% of the lesser of the start or end price for the offering period. The plan has four offering periods, each start/end dates coincide with the fiscal quarter and are awarded on the last day of the offering period. During the December 27, 2015December 28, 2014 and December 29, 2013 we issued 21,623, 11,015 and 4,624 shares, respectively. Under the ESPP, there are 212,589 shares available for future purchase at December 27, 2015.

Share repurchase program
   
In March 2015, the Board of Directors authorized a program to repurchase up to $1.0 million of the Company's common stock in open market transactions at market prices or otherwise. In April 2015, we repurchased $98,252 in outstanding shares, representing 24,500 shares. The weighted average purchase price per share was $4.01. Upon receipt, the repurchased shares were retired and restored to authorized but unissued shares of common stock.

Stock-based compensation

Stock-based compensation of $424,414, $338,810 and $278,290 was recognized during the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively, as compensation costs in the Consolidated Statements of Operations and as additional paid-in capital on the Consolidated Statements of Stockholders' Equity to reflect the fair value of shares vested.
 
Preferred stock

The Company has authorized 10,000,000 shares of preferred stock at a par value of $0.0001.  No preferred shares are issued or outstanding as of December 27, 2015.  Any preferences, rights, voting powers, restrictions, dividend limitations, qualifications, and terms and conditions of redemption shall be set forth and adopted by a Board of Directors' resolution prior to issuance of any series of preferred stock.
INCOME TAXES
INCOME TAXES
INCOME TAXES
 
The benefit for income taxes consists of the following components for the fiscal years ended December 27, 2015, December 28, 2014 and December 29, 2013:
 
 
 
Fiscal Years Ended
 
 
December 27, 2015
 
December 28, 2014
 
December 29, 2013
Federal
 
 
 
 
 
 
Current
 
$

 
$

 
$

Deferred
 
(9,073,787
)
 
(1,628,568
)
 
(306,951
)
State
 
 
 
 
 
 
Current
 

 
127,312

 
74,773

Deferred
 
(912,220
)
 
(205,480
)
 
(29,272
)
Income tax benefit
 
$
(9,986,007
)
 
$
(1,706,736
)
 
$
(261,450
)

 
The benefit for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to loss before income loss. The items causing this difference are as follows:
 
 
 
Fiscal Years Ended
 
 
December 27, 2015
 
December 28, 2014
 
December 29, 2013
Income tax benefit at federal statutory rate
 
$
(8,900,690
)
 
$
(1,011,580
)
 
$
(43,228
)
State income tax, net of federal benefit
 
(912,221
)
 
(51,689
)
 
30,032

Permanent differences
 
1,219,947

 
346,388

 
271,151

Tax credits
 
(1,393,043
)
 
(989,855
)
 
(519,405
)
Income tax benefit
 
$
(9,986,007
)
 
$
(1,706,736
)
 
$
(261,450
)

 
 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company expects the deferred tax assets to be fully realizable prior to expiration. Significant components of the Company's deferred income tax assets and liabilities are summarized as follows:
 
 
 
December 27, 2015
 
December 28, 2014
Deferred tax assets:
 
 
 
 
Net operating loss carry-forwards
 
$
7,368,309

 
$
915,900

Deferred rent expense
 
505,995

 
481,543

Start-up costs
 
138,832

 
99,261

Tax credit carry-forwards
 
4,810,760

 
3,417,716

Interest rate swaps
 
518,589

 
88,121

Investments
 

 
1,959

Sale leaseback deferred gain
 
734,744

 
788,195

Stock-based compensation
 
457,680

 
310,790

Accrued closure liabilities
 
455,324

 

Other
 
835,018

 
397,117

Total deferred tax assets
 
15,825,251

 
6,500,602

 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
Tax depreciation in excess of book
 
1,296,243

 
3,069,315

Goodwill amortization in excess of book
 
1,208,831

 
470,647

Total deferred tax liability
 
2,505,074

 
3,539,962

 
 
 
 
 
Net deferred income tax assets
 
$
13,320,177

 
$
2,960,640



In accordance with the provisions of ASC 740 a valuation allowance is established when it is more likely than not that some portion of the deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. We consider the reversal of deferred tax liabilities, projected future taxable income and tax planning strategies. Since we believe sufficient future taxable income will be generated to utilize the benefits of the deferred tax assets, a valuation allowance has not been recognized. In fiscal 2015, we had undergone significant changes to our company structure. This includes the disposition and acquisition of assets, namely the closure of 12 underperforming restaurants, impairment of four Bagger Dave’s restaurants and acquisition of 18 profitable BWW restaurants. As such, we believe the changes to our company in fiscal 2015 combined with the planned opening of additional BWW restaurants will provide future taxable income prior to the expirations of carryfowards, which begin in 2028. Management continually reviews the likelihood that deferred tax assets will be realized and the Company recognizes these benefits only as reassessment indicates that it is more likely than not that such tax benefits will be realized. 

The Company expects to use net operating loss and general business tax credit carryforwards before their 20-year expiration. A significant amount of net operating loss carry forwards were created in the past two years with expiration between 2034 and 2035. As of December 27, 2015, the Company has available federal and state net operating loss carryforwards of approximately $21.4 million and $17.6 million, respectively. Of that amount, approximately $600,000 relates to stock-based compensation tax deductions in excess of book compensation expense that will be credited to additional paid in capital in future periods when such deductions reduce taxes payable as determined based on a "with-and-without" approach.  Net operating losses relating to such benefits are not included in the table above. General business tax credits of $4.8 million will expire between 2028 and 2035
 
The Company applies the provisions of ASC 740 regarding the accounting for uncertainty in income taxes.  There are no amounts recorded on the Company's consolidated financial statements for uncertain positions.  The Company classifies all interest and penalties as income tax expense.  There are no accrued interest amounts or penalties related to uncertain tax positions as of December 27, 2015.
 
The Company files income tax returns in the United States federal jurisdiction and various state jurisdictions, and is subject to U.S. Federal, state, and local income tax examinations for tax years 2011 through 2014.
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES
14. COMMITMENTS AND CONTINGENCIES
 
The Company’s ADA requires DRH to open 42 restaurants by April 1, 2021.  As of December 27, 2015, we have opened 27 of the 42 restaurants required by the ADA.  With the remaining 15 restaurants, we expect the Company will operate 77 BWW restaurants by 2020, exclusive of potential additional BWW restaurant acquisitions.  
 
The Company is required to pay BWLD royalties (5.0% of net sales) and advertising fund contributions (3.0% of net sales globally plus an additional 0.25% or 0.5% of net sales for certain metropolitan cities) for the term of the individual franchise agreements. The Company incurred $7.2 million, $5.3 million, and $4.7 million in royalty expense for the fiscal years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively. Advertising fund contribution expenses were $4.6 million, $3.5 million, and $2.8 million for the fiscal years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively.  Amounts are recorded in Other operating cost on the Consolidated Statement of Operations.
 
The Company is required by its various BWLD franchise agreements to modernize the restaurants during the term of the agreements.  The individual agreements generally require improvements between the fifth and tenth year to meet the most current design model that BWLD has approved.  The modernization costs for a restaurant can range from approximately $50,000 to approximately $1.3 million depending on an individual restaurant's needs.
 
In 2013 we had a defined contribution 401(k) plan whereby eligible team members could contribute pre-tax wages in accordance with the provisions of the plan. We matched 100.0% of the first 3.0% and 50.0% of the next 2.0% of contributions made by eligible team members. Matching contributions of approximately $250,001 were made by us during the year ended December 29, 2013. Effective January 1, 2014, the Company ceased the matching program in favor of an annual discretionary contribution to the 401(k) plan. For fiscal 2015 and 2014, the discretionary match was 100.0% of 2.0% contributed, which equated to $156,472 and $168,446, respectively.
 
In October 2015, the Company settled two collective actions alleging violations of fair labor standards acts and minimum wage laws. The first action, Tammy Wolverton et al v. Diversified Restaurant Holdings, Inc. et al, was filed on March 31, 2014, in the United States District Court for the Eastern District of Michigan and made allegations regarding employees in Michigan. The second action, Lisa Murphy & Andre D. Jordan, Jr. v. Diversified Restaurants Holdings, Inc., et al, was filed on May 19, 2014, in United States District Court for the Northern District of Illinois, and made allegations involving employees in Illinois, Indiana and Florida.

The actions, in which the plaintiffs were represented by the same legal counsel, contained mirror allegations that tipped servers and bartenders in the Company’s restaurants were required to perform general preparation and maintenance duties, or “non-tipped work,” for which they should be compensated at the minimum wage.

We believe that the Company’s wage and hour policies comply with the law and that we had meritorious defenses to the substantive claims in these matters. However, in light of the potential cost and uncertainty involved, we settled with the plaintiffs for $1.9 million plus payroll taxes.
Prior to June 2015, the Company had not received a specific demand from the plaintiff’s for any calculable amount of damages and an actuarial expert retained by the Company estimated potential damages of an immaterial amount. As a result, the Company could not have reasonably concluded whether any significant damages were likely or reasonably possible to result prior to June 2015. During mediation conducted in June and July of 2015, the Company first received settlement demands from the plaintiffs and a reassessment of the matter that provided the Company with information needed to reassess its overall risk exposure. Following this mediation process, the Company determined based on the damages sought, cost of defense, and cost of human capital, the Company’s best course of action was to move forward with settlement negotiations.
On December 18, 2015, a collective action was filed against AMC Wings, Inc., and the Company in the U.S. District Court for the Southern District of Illinois by plaintiffs, David, et. al. A Sure Wing, LLC, the seller of the 18 St. Louis BWW restaurants acquired by the Company on June 29, 2015, was also named as a defendant. Plaintiffs primarily allege that former and current tipped workers at the above-mentioned companies were assigned to perform tasks outside the scope of their tipped positions, in violation of Illinois and federal law. The defendant companies filed their answers to the complaint on February 22, 2016, and the next status hearing is scheduled for March 18, 2016. At this stage in the process, plaintiffs have not specified the amount of their damages claim. The Company has filed an indemnity claim against A Sure Wing, LLC and has received a reciprocal indemnity claim from A Sure Wing, LLC. A Sure Wing, LLC and the Company have agreed to toll their respective indemnity claims pending resolution of the matter. This case is in the early stages and the plaintiffs have not specified the amount of damages, the Company is unable to reasonably estimate a possible loss or range of loss.
Additionally, the Company is subject to ordinary and routine legal proceedings, as well as demands, claims and threatened litigation, which arise in the ordinary course of its business.  The ultimate outcome of any litigation is uncertain.  We have insured and continue to insure against most of these types of claims. A judgment on any claim not covered by or in excess of our insurance coverage could materially adversely affect our financial condition or results of operations.
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE
 
The following is a reconciliation of basic and fully diluted earnings per common share for the years ended December 27, 2015, December 28, 2014 and December 29, 2013:
 
 
 
Fiscal Years Ended
 
 
December 27, 2015
 
December 28, 2014
 
December 29, 2013
Income (loss) available to common stockholders
 
$
(16,192,492
)
 
$
(1,268,497
)
 
$
134,308

Weighted-average shares outstanding
 
26,211,669

 
26,092,919

 
23,937,188

Effect of dilutive securities
 

 

 
120,884

Weighted-average shares outstanding - assuming dilution
 
26,211,669

 
26,092,919

 
24,058,072

Earnings per common share
 
$
(0.62
)
 
$
(0.05
)
 
$
0.01

Earnings per common share - assuming dilution
 
$
(0.62
)
 
$
(0.05
)
 
$
0.01

SUPPLEMENTAL CASH FLOWS INFORMATION
SUPPLEMENTAL CASH FLOWS INFORMATION
SUPPLEMENTAL CASH FLOWS INFORMATION
 
Other Cash Flows Information
 
Cash paid for interest was $3.1 million, $1.9 million, and $1.7 million during the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively.
 
Cash paid for income taxes was $94,290, $22,000 and $65,500 during the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively.
 
Supplemental Schedule of Non-Cash Operating, Investing, and Financing Activities
 
Noncash investing transactions for property and equipment not yet paid for December 27, 2015, December 28, 2014 and December 29, 2013 was $0.5 million, $3.1 million, and $1.9 million.
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The guidance for fair value measurements, FASB ASC 820, Fair Value Measurements and Disclosures, establishes the authoritative definition of fair value, sets out a framework for measuring fair value, and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We use a three-tier fair value hierarchy based upon observable and non-observable inputs as follows:
 
  
Level 1
Quoted market prices in active markets for identical assets and liabilities;
 
 
 
  
Level 2
Inputs, other than level 1 inputs, either directly or indirectly observable; and
 
 
 
●  
Level 3
Unobservable inputs developed using internal estimates and assumptions (there is little or no market data) which reflect those that market participants would use.
 
As of December 27, 2015 and December 28, 2014, respectively, our financial instruments consisted of cash and cash equivalents; including money market funds, accounts receivable, available-for-sale investments, accounts payable, and debt. The fair value of cash and cash equivalents, accounts receivable, and accounts payable approximate carrying value, due to their short-term nature.
 
The fair value of our interest rate swaps is determined based on valuation models, which utilize quoted interest rate curves to calculate the forward value and then discount the forward values to the present period. The Company measures the fair value using broker quotes which are generally based on market observable inputs including yield curves and the value associated with counterparty credit risk. Our interest rate swaps are classified as a Level 2 measurement as these securities are not actively traded in the market, but are observable based on transactions associated with bank loans with similar terms and maturities. See Note 1 and Note 10 for additional information pertaining to interest rates swaps.
 
The estimated fair values of the Company’s investment portfolio are based on prices provided by a third party pricing service and a third party investment manager. The prices provided by these services are based on quoted market prices, when available, non-binding broker quotes, or matrix pricing. The third party pricing service and the third party investment manager provide a single price or quote per security and the Company has not historically adjusted security prices. The Company obtains an understanding of the methods, models and inputs used by the third party pricing service and the third party investment manager, and has controls in place to validate that amounts provided represent fair values. Our investments are classified as a Level 2 measurement as these securities are not actively traded in the market, but are observable based on the quoted prices provided by our Portfolio managers
 
As of December 27, 2015 and December 28, 2014, our total debt was approximately $126.6 million and $61.8 million , respectively, which approximated fair value because the applicable interest rates are adjusted frequently based on short-term market rates (Level 2).
 
There were no transfers between levels of the fair value hierarchy during the fiscal years ended December 27, 2015 and December 28, 2014, respectively.

The following table presents the fair values for those assets and liabilities measured on a recurring basis as of December 27, 2015:
 
FAIR VALUE MEASUREMENTS
Description
 
Level 1
 
Level 2
 
Level 3
 
Asset/(Liability)
Total
Cash equivalents
 
$
2,000,000

 
$

 
$

 
$
2,000,000

Interest rate swaps
 

 
(1,525,255
)
 

 
(1,525,255
)
Total
 
$
2,000,000

 
$
(1,525,255
)
 
$

 
$
474,745


 
The following table presents the fair values for those assets and liabilities measured on a recurring basis as of December 28, 2014:
 
FAIR VALUE MEASUREMENTS
Description
 
Level 1
 
Level 2
 
Level 3
 
Asset/(Liability)
Total
Interest rate swaps
 
$

 
$
(259,626
)
 
$

 
$
(259,626
)
Debt securities
 
 
 
 
 
 
 
 
Obligations of states/municipals
 

 
1,185,983

 

 
1,185,983

Corporate securities
 

 
1,731,249

 

 
1,731,249

Total debt securities
 

 
2,917,232

 

 
2,917,232

Total
 
$

 
$
2,657,606

 
$

 
$
2,657,606

ACCUMULATED OTHER COMPREHENSIVE LOSS
ACCUMULATED OTHER COMPREHENSIVE LOSS
ACCUMULATED OTHER COMPREHENSIVE LOSS
 
The following table summarizes each component of Accumulated Other Comprehensive Loss ("OCL"):
 
Year Ended December 27, 2015
 
 
Interest Rate
Swaps
 
Investments
 
Total
Beginning balance
 
$
(171,352
)
 
$
(3,804
)
 
$
(175,156
)
Gain (loss) recorded to other comprehensive income
 
(1,265,783
)
 
5,763

 
(1,260,020
)
Tax benefit (expense)
 
430,468

 
(1,959
)
 
428,509

Other comprehensive income (loss)
 
(835,315
)
 
3,804

 
(831,511
)
Accumulated OCL
 
$
(1,006,667
)
 
$

 
$
(1,006,667
)
 
Year Ended December 28, 2014
 
 
Interest Rate
Swaps
 
Investments
 
Total
Beginning balance
 
$
(216,188
)
 
$
(29,176
)
 
$
(245,364
)
Gain (loss) recorded to other comprehensive income
 
67,933

 
38,443

 
106,376

Tax benefit (expense)
 
(23,097
)
 
(13,071
)
 
(36,168
)
Other comprehensive income
 
44,836

 
25,372

 
70,208

Accumulated OCL
 
$
(171,352
)
 
$
(3,804
)
 
$
(175,156
)
 
Year Ended December 29, 2013
 
 
Interest Rate
Swaps
 
Investments
 
Total
Beginning balance
 
$
(284,294
)
 
$

 
$
(284,294
)
Gain (loss) recorded to other comprehensive income
 
103,190

 
(44,206
)
 
58,984

Tax benefit (expense)
 
(35,084
)
 
15,030

 
(20,054
)
Other comprehensive income (loss)
 
68,106

 
(29,176
)
 
38,930

Accumulated OCL
 
$
(216,188
)
 
$
(29,176
)
 
$
(245,364
)
SUMMARY QUARTERLY FINANCIAL DATA (unaudited)
SUMMARY QUARTERLY FINANCIAL DATA (unaudited)
SUMMARY QUARTERLY FINANCIAL DATA (unaudited)
 
 
 
Fiscal Quarters
 
 
March 29,
2015
 
June 28,
2015
 
September 27,
2015
 
December 27,
2015
Revenue
 
$
39,440,332

 
$
36,871,838

 
$
47,077,816

 
$
49,095,392

 
 
 
 
 
 
 
 
 
Operating profit (loss)
 
608,504

 
(5,509,546
)
 
(3,140,137
)
 
(14,748,104
)
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
 
193,284

 
(5,341,323
)
 
(4,948,302
)
 
(16,082,158
)
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
262,642

 
$
(3,318,343
)
 
$
(3,581,535
)
 
$
(9,555,256
)
 
 
 
 
 
 
 
 
 
Basic earnings per share
 
$
0.01

 
$
(0.13
)
 
$
(0.14
)
 
$
(0.36
)
Fully diluted earnings per share
 
$
0.01

 
$
(0.13
)
 
$
(0.14
)
 
$
(0.36
)
 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding
 
 
 
 
 
 
 
 
Basic
 
26,149,184

 
26,151,853

 
26,251,621

 
26,294,530

Diluted
 
26,248,424

 
26,151,853

 
26,251,261

 
26,294,530


 
 
Fiscal Quarters
 
 
March 30,
2014
 
June 29,
2014
 
September 28,
2014
 
December 28,
2014
Revenue
 
$
30,473,014

 
$
30,009,621

 
$
32,782,092

 
$
35,148,721

 
 
 
 
 
 
 
 
 
Operating profit (loss)
 
778,170

 
291,659

 
185,059

 
(1,897,168
)
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
 
314,799

 
(179,368
)
 
(230,209
)
 
(2,880,455
)
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
367,857

 
$
(100,496
)
 
$
(182,109
)
 
$
(1,353,749
)
 
 
 
 
 
 
 
 
 
Basic earnings per share
 
$
0.01

 
$

 
$
(0.01
)
 
$
(0.05
)
Fully diluted earnings per share
 
$
0.01

 
$

 
$
(0.01
)
 
$
(0.05
)
 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding
 
 
 
 
 
 
 
 
Basic
 
26,048,805

 
26,067,958

 
26,107,627

 
26,147,287

Diluted
 
26,153,595

 
26,067,958

 
26,107,627

 
26,147,287

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Principles of Consolidation
 
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated.
Fiscal Year
 
The Company utilizes a 52- or 53-week accounting period that ends on the last Sunday in December. Fiscal year 2015 ended on December 27, 2015, fiscal year 2014 ended on December 28, 2014, and fiscal year 2013 ended December 29, 2013. Each fiscal year was comprised of 52 weeks.
Segment Reporting
 
The Company has two operating segments, BWW and Bagger Dave’s. The brands operate within the ultra-casual, full-service dining industry, providing similar products to similar customers. The brands also possess similar economic characteristics, resulting in similar long-term expected financial performance. Sales from external customers are derived principally from food and beverage sales. We do not rely on any major customers as a source of sales. We believe we meet the criteria for aggregating our operating segments into a single reporting segment.
Cash and Cash Equivalents
 
Cash and cash equivalents consist of cash on hand and demand deposits in banks. The Company considers all highly-liquid investments purchased with original maturities of three months or less to be cash and cash equivalents. The Company, at times throughout the year, may, in the ordinary course of business, maintain cash balances in excess of federally-insured limits. Management does not believe the Company is exposed to any unusual risks on such deposits.
Investments
 
The Company’s investment securities are classified as available-for-sale. Investments classified as available-for-sale are available to be sold in the future in response to the Company’s liquidity needs, changes in market interest rates, tax strategies, and asset-liability management strategies, among other reasons. Available-for-sale securities are reported at fair value, with unrealized gains and losses, net of taxes, reported in the accumulated other comprehensive income (loss) component of stockholders’ equity, and accordingly, have no effect on net income. Realized gains or losses on sale of investments are determined on the basis of specific costs of the investments. Dividend income is recognized when declared and interest income is recognized when earned. Discount or premium on debt securities purchased at other than par value are amortized using the effective yield method.
Accounts Receivable 
 
Accounts receivable primarily consist of contractually determined receivables for leasehold improvements and are stated at the amount management expects to collect. Balances that are outstanding after management has used reasonable collection efforts are written off with a corresponding charge to bad debt expense or deferred rent as applicable.
Gift Cards
 
Buffalo Wild Wings

The Company records gift cards under a BWLD system-wide program.  Gift cards sold are recorded as a gift card liability.  When redeemed, the gift card liability account is offset by recording the transaction as revenue.  At times, gift card redemptions can exceed amounts due to BWLD for gift card purchases resulting in an asset balance.  Under this centralized system, any breakage would be recorded by Blazin Wings, Inc., a subsidiary of BWLD, and is subject to the breakage laws in the state of Minnesota, where Blazin Wings, Inc. is located.
 
Bagger Dave’s

The Company records Bagger Dave's gift card sales as a gift card liability when sold.  When redeemed, the gift card liability account is offset by recording the transaction as revenue.  Michigan law states that gift cards cannot expire and any post-sale fees cannot be assessed until 5 years after the date of gift card purchase by the consumer.
Inventory
 
Inventory consists mainly of food and beverage products and is accounted for at the lower of cost or market using the first in, first out method of inventory valuation. Cash flows related to inventory sales are classified in net cash used by operating activities in the Consolidated Statements of Cash Flows.
Prepaids and Other Long-Term Assets
 
Prepaid assets consist principally of prepaid rent, insurance and contracts and are recognized ratably as operating expense over the period of future benefit. Other assets consist primarily of security deposits for operating leases and utilities.
Property and Equipment
 
Property and equipment are recorded at cost. Buildings are depreciated using the straight-line method over the estimated useful life, which is typically 39 years. Equipment and furniture and fixtures are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. Leasehold improvements, which include the cost of improvements funded by landlord incentives or allowances, are amortized using the straight-line method over the lesser of the term of the lease, with consideration of renewal options if renewals are reasonably assured because failure to renew would result in an economic penalty, or the estimated useful lives of the assets, which is typically five - 15 years. Maintenance and repairs are expensed as incurred. Upon retirement or disposal of assets, the cost and accumulated depreciation are eliminated from the respective accounts and the related gains or losses are credited or charged to earnings.
 
The Company capitalizes items associated with construction but not yet placed into service, known as construction in progress (“CIP”). Items capitalized include fees associated with the design, build out, furnishing of the restaurants, leasehold improvements, construction period interest (when applicable), equipment, and furniture and fixtures. Restaurant CIP is not amortized or depreciated until the related assets are placed into service. Items are placed into service according to their asset category when the restaurant is open for service.
Intangible Assets
 
Amortizable intangible assets consist of franchise fees, trademarks, non-compete agreements, favorable and unfavorable operating leases, and loan fees and are stated at cost, less accumulated amortization. Intangible assets are amortized on a straight-line basis over the estimated useful life, as follows: Franchise fees- 1020 years, Trademarks- 15 years, Non-compete- 3 years, Favorable and unfavorable leases- over the term of the respective leases and Loan fees- over the term of the respective loan.
  
Impairment or Disposal of Long-Lived Assets

We review long-lived assets quarterly to determine if triggering events have occurred which would require a test to determine if the carrying amount of these assets may not be recoverable based on estimated future cash flows. Assets are reviewed at the lowest level for which cash flows can be identified, which is at the individual restaurant level. In the absence of extraordinary circumstances, restaurants are included in the impairment analysis after they have been open for two years. We evaluate the recoverability of a restaurant’s long-lived assets, including buildings, intangibles, leasehold improvements, furniture, fixtures, and equipment over the remaining life of the primary asset in the asset group, after considering the potential impact of planned operational improvements, marketing programs, and anticipated changes in the trade area. In determining future cash flows, significant estimates are made by management with respect to future operating results for each restaurant over the remaining life of the primary asset in the asset group. If assets are determined to be impaired, the impairment charge is measured by calculating the amount by which the asset carrying amount exceeds its fair value based on our estimate of discounted future cash flows. The determination of asset fair value is also subject to significant judgment. Refer to Note 4 for additional information.

We account for exit or disposal activities, including restaurant closures, in accordance with ASC Topic 420, Exit or Disposal Cost Obligations. Such costs include the cost of disposing of the assets as well as other facility-related expenses from previously closed restaurants. These costs are generally expensed as incurred. Additionally, at the date we cease using a property under an operating lease, we record a liability for the net present value of any remaining lease obligations, net of estimated sublease income. Any subsequent adjustments to that liability as a result of lease termination or changes in estimates of sublease income are recorded in the period incurred. Refer to Note 4 for additional information.

Indefinite-Lived Intangible Assets

Liquor licenses also a component of intangible assets, are deemed to have an indefinite life and, accordingly, are not amortized. Management reviews liquor license assets on an annual basis (at year-end) to determine whether carrying values have been impaired. We identify potential impairments for liquor licenses by comparing the fair value with its carrying amount. If the fair value exceeds the carrying amount, the liquor licenses are not impaired. If the carrying amount exceeds the fair value, an impairment loss is recorded for the difference.  If the fair value of the asset is less than the carrying amount, an impairment is recorded.
Goodwill
 
Goodwill is not amortized and represents the excess of cost over the fair value of identified net assets of businesses acquired. Goodwill is subject to an annual impairment analysis or more frequently if indicators of impairment exist. At December 27, 2015 and December 28, 2014, we had goodwill of $50.1 million and $11.0 million that was assigned to our Buffalo Wild Wings reporting unit.
 
The impairment analysis, if necessary, consists of a two-step process. The first step is to compare the fair value of the reporting unit to its carrying value, including goodwill. We estimate fair value using market information (market approach) and discounted cash flow projections (income approach). The income approach uses the reporting unit’s projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital that reflects market conditions. The projection uses management’s best estimates of projected revenue, costs and cash expenditures, including an estimate of new restaurant openings and related capital expenditures. Other significant estimates also include terminal growth rates and working capital requirements. We supplement our estimate of fair value under the income approach by using a market approach which estimates fair value by applying multiples to the reporting unit’s projected operating performance. The multiples are derived from comparable publicly traded companies with similar characteristics to the reporting unit. If the fair value of the reporting unit is less than its carrying value, the second step of the impairment analysis must be performed in order to determine the amount of impairment loss, if any. The second step compares the implied fair value of goodwill with the carrying amount of that goodwill. If the carrying amount of the goodwill exceeds its implied fair value, an impairment charge is recognized in an amount equal to that excess.
Deferred Rent
 
Certain operating leases provide for minimum annual payments that increase over the life of the lease. Typically, our operating leases contain renewal options under which we may extend the initial lease terms for periods of five to 10 years. The aggregate minimum annual payments are expensed on a straight-line basis commencing at the start of our construction period and extending over the term of the related lease, including option renewals as deemed reasonably assured. The amount by which straight-line rent exceeds actual lease payment requirements in the early years of the lease is accrued as deferred rent liability and reduced in later years when the actual cash payment requirements exceed the straight-line expense. The Company also accounts, in its straight-line computation, for the effect of any "rental holidays", "free rent periods", and "landlord incentives or allowances".
 
Deferred Gains
 
Deferred gains on the sale leaseback transaction described in Note 2, are recognized into income over the life of the related operating lease agreements.
Revenue Recognition
 
Revenues from food and beverage sales are recognized and generally collected at the point of sale. All sales taxes are presented on a net basis and are excluded from revenue.
Advertising
 
Advertising expenses associated with contributions to the BWLD advertising fund (3.0% of net sales globally plus an additional 0.25% or 0.5% of net sales for certain metropolitan cities) are expensed as contributed and all other advertising expenses are expensed as incurred.
Pre-opening Costs
 
Pre-opening costs are those costs associated with opening new restaurants and will vary based on the number of new locations opening and under construction. The Company also reclassifies labor costs that exceed the historical average for the first three months of restaurant operations that are attributable to training. These costs are expensed as incurred.
Income Taxes
 
Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.
 
The Company applies the provisions of FASB ASC 740, Income Taxes, (“ASC 740”) regarding the accounting for uncertainty in income taxes. The Company classifies all interest and penalties as income tax expense.
Earnings Per Common Share
 
Earnings per share are calculated under the provisions of FASB ASC 260, Earnings per Share, which requires a dual presentation of "basic" and "diluted" earnings per share on the face of the Consolidated Statements of Operations. Basic earnings per common share excludes dilution and is computed by dividing the net earnings available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share include dilutive common stock equivalents consisting of stock options determined by the treasury stock method. Restricted stock awards contain nonforfeitable rights to dividends, making such awards participating securities.  The calculation of basic and diluted earnings per share uses an earnings allocation method to consider the impact of restricted stock. 
Stock Based Compensation
 
The Company estimates the fair value of stock option awards utilizing the Black-Scholes pricing model.  The fair value of the awards is amortized as compensation expense on a straight-line basis over the requisite service period of the award, which is generally the vesting period.  The fair value of restricted shares is equal to the number of restricted shares issued times the Company’s stock price on the date of grant and is amortized as compensation expense on a straight-line basis over the service period of the award.
Concentration Risks
 
Approximately 79.9%, 79.1%, and 80.9% of the Company's revenues for the years ended December 27, 2015, December 28, 2014 and December 29, 2013, respectively, were generated from food and beverage sales from restaurants located in the Midwest region.
Use of Estimates
 
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Interest Rate Swap Agreements
 
The Company utilizes interest rate swap agreements with Citizens Bank, N.A. (“Citizens”) to fix interest rates on a portion of the Company’s portfolio of variable rate debt, which reduces exposure to interest rate fluctuations.  Our derivative financial instruments are recorded at fair value on the Consolidated Balance Sheets. The effective portion of changes in the fair value of derivatives which qualify for hedge accounting is recorded in other comprehensive income and is recognized in the Consolidated Statements of Operations when the hedged item affects earnings. Ineffective portion of the change in fair value of a hedge would be recognized in income immediately. The Company does not use any other types of derivative financial instruments to hedge such exposures, nor does it use derivatives for speculative purposes.  
 
The interest rate swap agreements associated with the Company’s current debt agreements qualify for hedge accounting. As such, the Company records the change in the fair value of its swap agreements as a component of accumulated other comprehensive income (loss), net of tax. The Company records the fair value of its interest swaps on the Consolidated Balance Sheets in other long-term assets or other liabilities depending on the fair value of the swaps.
Recent Accounting Pronouncements
 
In February 2016, FASB issued ASU 2016-02, Leases. ASU 2016-02 requires that lease arrangements longer than 12 months result in a lessee recognizing a lease asset and liability. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact of the updated guidance on our consolidated financial statements.
 
In November 2015, the FASB issued ASU 2015-17, Topic 740: Balance Sheet Classification of Deferred Taxes (“ASU No. 2015-17”), which simplifies the presentation of deferred income taxes. ASU No. 2015-17 provides presentation requirements to classify deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The Company adopted this standard as of December 27, 2015, with prospective application. The adoption of ASU No. 2015-17 had no impact on the Company’s Consolidated Statements of Operations and Comprehensive Income.

In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest, which updates guidance on the presentation of debt issuance costs. The guidance requires debt issuance costs to be presented as a direct deduction of debt balances on the statement of financial position, similar to the presentation of debt discounts. The guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. We will comply with this guidance in fiscal year 2016. We do not expect the standard will have a significant impact on our consolidated financial statements.  

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP.  The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein.  We are currently evaluating the impact of our pending adoption of ASU 2014-09, although based on the nature of our business we do not expect the standard will have a significant impact on our consolidated financial statements.  
 
We reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to our operations or that no material effect is expected on our consolidated financial statements as a result of future adoption.
ACQUISITIONS (Tables)
The following table summarizes the estimated fair values of net assets acquired and liabilities assumed:

Working capital
$
413,232

Fixed assets
13,993,000

Intangible assets
505,000

Favorable lease
112,344

Unfavorable lease
(58,797
)
Goodwill
39,098,451

Net Cash paid for acquisition
$
54,063,230

The following table summarizes the estimated fair values of net assets acquired and liabilities assumed:
 
Working capital
$
57,600

Property and equipment
656,146

Franchise fees
72,750

Goodwill
2,419,854

Net Cash paid for acquisition
$
3,206,350

The following table summarizes the unaudited pro forma financial information as if the acquisition had occurred at the beginning of the periods presented:

 
 
Fiscal Years Ended
 
 
December 27, 2015
 
December 28, 2014
Revenue
 
$
193,481,326

 
$
168,221,665

Net income (loss)
 
(15,250,523
)
 
684,575

Basic earnings (loss) per share
 
(0.58
)
 
0.03

Diluted earnings (loss) per share
 
(0.58
)
 
0.03

IMPAIRMENTS, DISPOSALS AND EXIT COSTS (Tables)
The following table summarizes the Company’s accrual activity related to facility closure and other costs, primarily associated with the 2015 Restaurant Closures during the fiscal year ended December 27, 2015:
 
 
Fiscal
 
 
2015
Beginning of the year
 
$

Charges
 
1,414,308

Cash payments
 
(75,122
)
End of the year
 
$
1,339,186

The following is a summary of the expenses recognized in the Consolidated Statement of Operations during the year ended December 27, 2015 related to the restaurant closures and impairment of property and equipment:
 
 
Location in the Consolidated statement of Operations
 
Fiscal
Description
 
 
2015
Property and equipment impairments
 
Impairment and loss on asset disposals
 
$
12,778,155

Facility closure and other expenses
 
Occupancy costs
 
733,834

Severance expense
 
Compensation costs
 
154,764

 
 
 
 
$
13,666,753

INVESTMENTS (Tables)
The amortized cost, gross unrealized holding gains, gross unrealized holding loss, and fair value of available-for-sale securities by type are as follows: 
 
 
 
December 28, 2014
 
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Loss
 
Estimated
Fair Value
Debt securities:
 
 
 
 
 
 
 
 
Obligations of states/municipals
 
$
1,190,261

 
$

 
$
(4,278
)
 
$
1,185,983

Corporate securities
 
1,732,734

 

 
(1,485
)
 
1,731,249

Total debt securities
 
$
2,922,995

 
$

 
$
(5,763
)
 
$
2,917,232

 

Gross unrealized gains and losses on available-for-sale securities, recorded in accumulated other comprehensive loss were as follows:
 
 
 
December 28, 2014
 
December 29, 2013
Unrealized gain
 
$

 
$
236

Unrealized loss
 
(5,763
)
 
(44,442
)
Net unrealized loss
 
(5,763
)
 
(44,206
)
Deferred federal income tax benefit
 
1,959

 
15,030

Net unrealized loss on investments, net of deferred income tax
 
$
(3,804
)
 
$
(29,176
)


PROPERTY AND EQUIPMENT, NET (Tables)
Schedule of property and equipment
Property and equipment are comprised of the following:
 
 
 
December 27, 2015
 
December 28, 2014
Land
 
$
37,500

 
$
3,087,514

Building
 
2,339,219

 
2,339,219

Equipment
 
32,912,992

 
29,251,119

Furniture and fixtures
 
8,194,060

 
7,458,292

Leasehold improvements
 
72,148,545

 
56,971,815

Restaurant construction in progress
 
1,768,027

 
4,731,045

Total
 
117,400,343

 
103,839,004

Less accumulated depreciation
 
(38,210,682
)
 
(32,330,054
)
Property and equipment, net
 
$
79,189,661

 
$
71,508,950

INTANGIBLE ASSETS (Tables)
Intangible assets are comprised of the following:
 
 
 
December 27, 2015
 
December 28, 2014
Amortized intangible assets
 
 
 
 
Franchise fees
 
$
1,278,142

 
$
647,363

Trademark
 
66,826

 
64,934

Non-compete
 
76,560

 
76,560

Favorable operating leases
 
351,344

 
239,000

Loan fees
 
751,070

 
130,377

Total
 
2,523,942

 
1,158,234

 
 
 
 
 
Less accumulated amortization
 
(557,527
)
 
(377,839
)
Amortized intangible assets, net
 
1,966,415

 
780,395

 
 
 
 
 
Unamortized intangible assets
 
 
 
 
Liquor licenses
 
2,017,618

 
2,136,103

Total intangible assets, net
 
$
3,984,033

 
$
2,916,498

Based on the current intangible assets and their estimated useful lives, future intangible-related expense for the next five years and thereafter is projected as follows:
 
Year
Amount
2016
$
262,945

2017
261,409

2018
259,734

2019
259,176

2020
182,973

Thereafter
740,178

Total
$
1,966,415

OTHER ACCRUED LIABILITIES (Tables)
Other Accrued Liabilities
OTHER ACCRUED LIABILITES
 
 
December 27, 2015
 
December 28, 2014
Sales tax payable
 
$
987,795

 
$
770,938

Accrued interest
 
495,365

 
138,538

Closure liability - current
 
1,008,707

 

Other
 
1,171,344

 
448,034

Total accrued other liabilities
 
3,663,211

 
1,357,510

LONG-TERM DEBT (Tables)
Long-term debt consists of the following obligations:  
 
 
 
December 27, 2015
 
December 28, 2014
Note payable - $120.0 million term loan; payable to Citizens with a senior lien on all the Company’s personal property and fixtures. Scheduled monthly principal payments are approximately $833,333 plus accrued interest through maturity in June 2020. Interest is charged based on one-month LIBOR plus an applicable margin, which ranges from 2.25% to 3.5%, depending on the lease adjusted leverage ratio defined in the terms of the agreement. The rate at December 27, 2015 was approximately 3.86%.
 
$
115,833,333

 
$


 


 
 
Note payable - $30.0 million development line of credit; payable to Citizens with a senior lien on all the Company’s personal property and fixtures. Payments are due monthly once fully drawn and matures in June 2020. Interest is charged based on one-month LIBOR plus an applicable margin, which ranges from 2.25% to 3.5%, depending on the lease adjusted leverage ratio defined in the terms of the agreement. Once fully drawn, payments will be due monthly; the note matures June 2020. The rate at December 27, 2015 was approximately 3.86%.
 
11,090,323

 



 
 
 


Note payable - $56.0 million term loan; payable to Citizens with a senior lien on all the Company’s personal property and fixtures. Scheduled monthly principal payments are approximately $666,667 plus accrued interest through maturity in December 2019. Interest was charged based on one-month LIBOR plus an applicable margin, which ranges from 2.25% to 3.15%, depending on the lease adjusted leverage ratio defined in the terms of the agreement. The rate at December 28, 2014 was approximately 2.7%.
 

 
56,000,000


 
 
 


Note payable - $20.0 million development line of credit; payable to Citizens with a senior lien on all the Company’s personal property and fixtures. Payments are due monthly once fully drawn and matures in December 2019. Interest was charged based on one-month LIBOR plus an applicable margin, which ranges from 2.25% to 3.15%, depending on the lease adjusted leverage ratio defined in the terms of the agreement. The rate at December 28, 2014 was approximately 2.7%.
 

 
5,768,399

 
 
 
 
 
Unamortized discount
 
(322,349
)
 

 
 
 
 
 
Total debt
 
126,601,307

 
61,768,399

 
 
 
 
 
Less current portion
 
(9,918,827
)
 
(8,155,903
)
 
 
 
 
 
Long-term debt, net of current portion
 
$
116,682,480

 
$
53,612,496

Based on the long-term debt terms that existed at December 27, 2015, the scheduled principal maturities, net of unamortized discount, for the next five years and thereafter are summarized as follows:
 
 
Amount
2016
$
9,918,827

2017
10,480,330

2018
11,042,033

2019
11,047,760

2020
84,112,357

Thereafter

Total
$
126,601,307

The following summarizes the fair values of derivative instruments designated as cash flow hedges which were outstanding:

 
 
 
December 27, 2015
 
 
 
Notional amounts
 
Derivative assets
 
Derivative liabilities
Interest rate swaps
Rate
Expires
 
 
 
 
 
April 2012
1.4%
April 2019
$
7,619,048

 
$

 
$
56,280

October 2012
0.9%
October 2017
3,214,286

 

 
3,027

July 2013
1.4%
April 2018
8,190,476

 

 
60,164

May 2014
1.5%
April 2018
11,428,571

 

 
122,716

January 2015
1.8%
December 2019
20,547,619

 

 
415,459

August 2015
2.3%
June 2020
49,696,875

 

 
867,609

Total
 
 
$
100,696,875

 
$

 
$
1,525,255


 
 
 
December 28, 2014
 
 
 
Notional amounts
 
Derivative assets
 
Derivative liabilities
Interest rate swaps
Rate
Expires
 
 
 
 
 
April 2012
1.4%
April 2019
$
9,904,762

 
$

 
$
73,492

October 2012
0.9%
October 2017
4,071,429

 
3,119

 

July 2013
1.4%
April 2018
11,619,048

 

 
106,061

May 2014
1.5%
April 2018
12,857,143

 

 
83,192

Total
 
 
$
38,452,382

 
$
3,119

 
$
262,745

STOCK-BASED COMPENSATION (Tables)
Schedule of restricted stock transactions
The following table presents the restricted stock transactions for fiscal 2015:
 
 
Number of
Restricted
Stock Shares
Unvested, December 28, 2014
164,867

Granted
131,752

Vested
(45,521
)
Vested shares tax portion
(1,387
)
Forfeited
(8,587
)
Unvested, December 27, 2015
241,124


The following table presents the restricted stock transactions for fiscal 2014:
 
 
Number of
Restricted
Stock Shares
Unvested, December 29, 2013
116,667

Granted
91,966

Vested
(41,031
)
Forfeited
(2,735
)
Unvested, December 28, 2014
164,867

 
The following table presents the restricted stock transactions for fiscal 2013:
 
 
Number of
Restricted
Stock Shares
Unvested, December 30, 2012
54,900

Granted
145,575

Vested
(26,700
)
Forfeited
(57,108
)
Unvested, December 29, 2013
116,667

INCOME TAXES (Tables)
The benefit for income taxes consists of the following components for the fiscal years ended December 27, 2015, December 28, 2014 and December 29, 2013:
 
 
 
Fiscal Years Ended
 
 
December 27, 2015
 
December 28, 2014
 
December 29, 2013
Federal
 
 
 
 
 
 
Current
 
$

 
$

 
$

Deferred
 
(9,073,787
)
 
(1,628,568
)
 
(306,951
)
State
 
 
 
 
 
 
Current
 

 
127,312

 
74,773

Deferred
 
(912,220
)
 
(205,480
)
 
(29,272
)
Income tax benefit
 
$
(9,986,007
)
 
$
(1,706,736
)
 
$
(261,450
)
The benefit for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to loss before income loss. The items causing this difference are as follows:
 
 
 
Fiscal Years Ended
 
 
December 27, 2015
 
December 28, 2014
 
December 29, 2013
Income tax benefit at federal statutory rate
 
$
(8,900,690
)
 
$
(1,011,580
)
 
$
(43,228
)
State income tax, net of federal benefit
 
(912,221
)
 
(51,689
)
 
30,032

Permanent differences
 
1,219,947

 
346,388

 
271,151

Tax credits
 
(1,393,043
)
 
(989,855
)
 
(519,405
)
Income tax benefit
 
$
(9,986,007
)
 
$
(1,706,736
)
 
$
(261,450
)
Significant components of the Company's deferred income tax assets and liabilities are summarized as follows:
 
 
 
December 27, 2015
 
December 28, 2014
Deferred tax assets:
 
 
 
 
Net operating loss carry-forwards
 
$
7,368,309

 
$
915,900

Deferred rent expense
 
505,995

 
481,543

Start-up costs
 
138,832

 
99,261

Tax credit carry-forwards
 
4,810,760

 
3,417,716

Interest rate swaps
 
518,589

 
88,121

Investments
 

 
1,959

Sale leaseback deferred gain
 
734,744

 
788,195

Stock-based compensation
 
457,680

 
310,790

Accrued closure liabilities
 
455,324

 

Other
 
835,018

 
397,117

Total deferred tax assets
 
15,825,251

 
6,500,602

 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
Tax depreciation in excess of book
 
1,296,243

 
3,069,315

Goodwill amortization in excess of book
 
1,208,831

 
470,647

Total deferred tax liability
 
2,505,074

 
3,539,962

 
 
 
 
 
Net deferred income tax assets
 
$
13,320,177

 
$
2,960,640

EARNINGS PER COMMON SHARE (Tables)
Reconciliation of basic and fully diluted earnings per common share
The following is a reconciliation of basic and fully diluted earnings per common share for the years ended December 27, 2015, December 28, 2014 and December 29, 2013:
 
 
 
Fiscal Years Ended
 
 
December 27, 2015
 
December 28, 2014
 
December 29, 2013
Income (loss) available to common stockholders
 
$
(16,192,492
)
 
$
(1,268,497
)
 
$
134,308

Weighted-average shares outstanding
 
26,211,669

 
26,092,919

 
23,937,188

Effect of dilutive securities
 

 

 
120,884

Weighted-average shares outstanding - assuming dilution
 
26,211,669

 
26,092,919

 
24,058,072

Earnings per common share
 
$
(0.62
)
 
$
(0.05
)
 
$
0.01

Earnings per common share - assuming dilution
 
$
(0.62
)
 
$
(0.05
)
 
$
0.01

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
Schedule of fair values for assets and liabilities measured on a recurring basis
The following table presents the fair values for those assets and liabilities measured on a recurring basis as of December 27, 2015:
 
FAIR VALUE MEASUREMENTS
Description
 
Level 1
 
Level 2
 
Level 3
 
Asset/(Liability)
Total
Cash equivalents
 
$
2,000,000

 
$

 
$

 
$
2,000,000

Interest rate swaps
 

 
(1,525,255
)
 

 
(1,525,255
)
Total
 
$
2,000,000

 
$
(1,525,255
)
 
$

 
$
474,745


 
The following table presents the fair values for those assets and liabilities measured on a recurring basis as of December 28, 2014:
 
FAIR VALUE MEASUREMENTS
Description
 
Level 1
 
Level 2
 
Level 3
 
Asset/(Liability)
Total
Interest rate swaps
 
$

 
$
(259,626
)
 
$

 
$
(259,626
)
Debt securities
 
 
 
 
 
 
 
 
Obligations of states/municipals
 

 
1,185,983

 

 
1,185,983

Corporate securities
 

 
1,731,249

 

 
1,731,249

Total debt securities
 

 
2,917,232

 

 
2,917,232

Total
 
$

 
$
2,657,606

 
$

 
$
2,657,606

ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)
Summary of each component of Accumulated Other Comprehensive Loss
The following table summarizes each component of Accumulated Other Comprehensive Loss ("OCL"):
 
Year Ended December 27, 2015
 
 
Interest Rate
Swaps
 
Investments
 
Total
Beginning balance
 
$
(171,352
)
 
$
(3,804
)
 
$
(175,156
)
Gain (loss) recorded to other comprehensive income
 
(1,265,783
)
 
5,763

 
(1,260,020
)
Tax benefit (expense)
 
430,468

 
(1,959
)
 
428,509

Other comprehensive income (loss)
 
(835,315
)
 
3,804

 
(831,511
)
Accumulated OCL
 
$
(1,006,667
)
 
$

 
$
(1,006,667
)
 
Year Ended December 28, 2014
 
 
Interest Rate
Swaps
 
Investments
 
Total
Beginning balance
 
$
(216,188
)
 
$
(29,176
)
 
$
(245,364
)
Gain (loss) recorded to other comprehensive income
 
67,933

 
38,443

 
106,376

Tax benefit (expense)
 
(23,097
)
 
(13,071
)
 
(36,168
)
Other comprehensive income
 
44,836

 
25,372

 
70,208

Accumulated OCL
 
$
(171,352
)
 
$
(3,804
)
 
$
(175,156
)
 
Year Ended December 29, 2013
 
 
Interest Rate
Swaps
 
Investments
 
Total
Beginning balance
 
$
(284,294
)
 
$

 
$
(284,294
)
Gain (loss) recorded to other comprehensive income
 
103,190

 
(44,206
)
 
58,984

Tax benefit (expense)
 
(35,084
)
 
15,030

 
(20,054
)
Other comprehensive income (loss)
 
68,106

 
(29,176
)
 
38,930

Accumulated OCL
 
$
(216,188
)
 
$
(29,176
)
 
$
(245,364
)
SUMMARY QUARTERLY FINANCIAL DATA (unaudited) (Tables)
Summary of quarterly financial data
 
 
Fiscal Quarters
 
 
March 29,
2015
 
June 28,
2015
 
September 27,
2015
 
December 27,
2015
Revenue
 
$
39,440,332

 
$
36,871,838

 
$
47,077,816

 
$
49,095,392

 
 
 
 
 
 
 
 
 
Operating profit (loss)
 
608,504

 
(5,509,546
)
 
(3,140,137
)
 
(14,748,104
)
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
 
193,284

 
(5,341,323
)
 
(4,948,302
)
 
(16,082,158
)
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
262,642

 
$
(3,318,343
)
 
$
(3,581,535
)
 
$
(9,555,256
)
 
 
 
 
 
 
 
 
 
Basic earnings per share
 
$
0.01

 
$
(0.13
)
 
$
(0.14
)
 
$
(0.36
)
Fully diluted earnings per share
 
$
0.01

 
$
(0.13
)
 
$
(0.14
)
 
$
(0.36
)
 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding
 
 
 
 
 
 
 
 
Basic
 
26,149,184

 
26,151,853

 
26,251,621

 
26,294,530

Diluted
 
26,248,424

 
26,151,853

 
26,251,261

 
26,294,530


 
 
Fiscal Quarters
 
 
March 30,
2014
 
June 29,
2014
 
September 28,
2014
 
December 28,
2014
Revenue
 
$
30,473,014

 
$
30,009,621

 
$
32,782,092

 
$
35,148,721

 
 
 
 
 
 
 
 
 
Operating profit (loss)
 
778,170

 
291,659

 
185,059

 
(1,897,168
)
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
 
314,799

 
(179,368
)
 
(230,209
)
 
(2,880,455
)
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
367,857

 
$
(100,496
)
 
$
(182,109
)
 
$
(1,353,749
)
 
 
 
 
 
 
 
 
 
Basic earnings per share
 
$
0.01

 
$

 
$
(0.01
)
 
$
(0.05
)
Fully diluted earnings per share
 
$
0.01

 
$

 
$
(0.01
)
 
$
(0.05
)
 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding
 
 
 
 
 
 
 
 
Basic
 
26,048,805

 
26,067,958

 
26,107,627

 
26,147,287

Diluted
 
26,153,595

 
26,067,958

 
26,107,627

 
26,147,287

NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Business (Details) (USD $)
0 Months Ended 12 Months Ended
Apr. 23, 2013
Dec. 27, 2015
segment
restaurant
Dec. 28, 2014
Dec. 29, 2013
Dec. 28, 2008
Dec. 27, 2015
BWW
restaurant
Dec. 27, 2015
BWW
Michigan
restaurant
Dec. 27, 2015
BWW
Florida
restaurant
Dec. 27, 2015
BWW
Missouri
restaurant
Dec. 27, 2015
BWW
Illinois
restaurant
Dec. 27, 2015
BWW
Indiana
restaurant
Dec. 27, 2015
Bagger Dave's
restaurant
Dec. 27, 2015
Bagger Dave's
Michigan
restaurant
Dec. 27, 2015
Bagger Dave's
Indiana
restaurant
Dec. 27, 2015
Bagger Dave's
Ohio
restaurant
Dec. 31, 2020
Exclusive of potential additional restaurant acquisitions
Forecast
restaurant
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of operating segments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of restaurants
 
80 
 
 
 
62 
20 
15 
15 
18 
16 
77 
Proceeds from initial public offering
 
 
 
 
$ 735,000 
 
 
 
 
 
 
 
 
 
 
 
Sale of common stock from follow-on public offering, net of fees and expenses (in shares)
6,900,000 
 
 
 
140,000 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from sale of common stock, net of underwriter fees
$ 31,900,000 
$ 0 
$ 0 
$ 31,982,679 
 
 
 
 
 
 
 
 
 
 
 
 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fiscal Year (Details)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
Fiscal period duration
364 days 
364 days 
364 days 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details)
12 Months Ended
Dec. 27, 2015
segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Number of operating segments
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
Allowance for doubtful accounts
$ 0 
$ 0 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Gift Cards (Details) (Sales revenue, Midwest Region, Geographic concentration risk, USD $)
Dec. 27, 2015
Dec. 28, 2014
Sales revenue |
Midwest Region |
Geographic concentration risk
 
 
Concentration Risk [Line Items]
 
 
Gift card liability
$ 136,874 
$ 10,706 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details)
12 Months Ended
Dec. 27, 2015
Building
 
Property, Plant and Equipment [Line Items]
 
Useful life
39 years 
Equipment and furniture and fixtures |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Useful life
3 years 
Equipment and furniture and fixtures |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Useful life
7 years 
Leasehold improvements |
Minimum
 
Property, Plant and Equipment [Line Items]
 
Useful life
5 years 
Leasehold improvements |
Maximum
 
Property, Plant and Equipment [Line Items]
 
Useful life
15 years 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details)
12 Months Ended
Dec. 27, 2015
Franchise fees |
Minimum
 
Finite-Lived Intangible Assets [Line Items]
 
Useful life
10 years 
Franchise fees |
Maximum
 
Finite-Lived Intangible Assets [Line Items]
 
Useful life
20 years 
Trademarks
 
Finite-Lived Intangible Assets [Line Items]
 
Useful life
15 years 
Non-compete
 
Finite-Lived Intangible Assets [Line Items]
 
Useful life
3 years 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
Goodwill
$ 50,097,081 
$ 10,998,630 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred Rent (Details)
12 Months Ended
Dec. 27, 2015
Minimum
 
Operating Leased Assets [Line Items]
 
Renewal term
5 years 
Maximum
 
Operating Leased Assets [Line Items]
 
Renewal term
10 years 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Schedule of Advertising Expenses [Line Items]
 
 
 
Advertising fund contribution expense (as a percent)
3.00% 
 
 
Advertising expenses
$ 4.6 
$ 3.5 
$ 2.8 
Certain cities |
Minimum
 
 
 
Schedule of Advertising Expenses [Line Items]
 
 
 
Advertising fund contribution expense (as a percent)
0.25% 
 
 
Certain cities |
Maximum
 
 
 
Schedule of Advertising Expenses [Line Items]
 
 
 
Advertising fund contribution expense (as a percent)
0.50% 
 
 
General and Administrative Expense
 
 
 
Schedule of Advertising Expenses [Line Items]
 
 
 
Advertising expenses
3.4 
2.3 
0.5 
Other Operating Costs
 
 
 
Schedule of Advertising Expenses [Line Items]
 
 
 
Advertising expenses
$ 4.6 
$ 3.5 
$ 2.8 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Pre-opening Costs (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Schedule of Other Operating Cost and Expense [Line Items]
 
 
 
Pre-opening costs
$ 3,244,157 
$ 3,473,664 
$ 3,230,122 
Excess labor cost
 
 
 
Schedule of Other Operating Cost and Expense [Line Items]
 
 
 
Pre-opening costs
$ 903,000 
$ 516,000 
$ 1,100,000 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
Accrued interest amounts or penalties related to uncertain tax positions
$ 0 
$ 0 
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration Risks (Details) (Sales revenue, Geographic concentration risk, Midwest Region)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Sales revenue |
Geographic concentration risk |
Midwest Region
 
 
 
Concentration Risk [Line Items]
 
 
 
Concentration risk (as a percent)
79.90% 
79.10% 
80.90% 
SIGNIFICANT BUSINESS TRANSACTIONS (Details) (USD $)
0 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 3 Months Ended
Apr. 23, 2013
Dec. 27, 2015
restaurant
Dec. 28, 2014
Dec. 29, 2013
Dec. 28, 2008
Apr. 23, 2013
Dec. 27, 2015
Bagger Dave's
restaurant
Dec. 27, 2015
BWW
restaurant
Aug. 31, 2015
Real Estate Investment Trust
Dec. 27, 2015
Real Estate Investment Trust
renewal_option
Oct. 6, 2014
Real Estate Investment Trust
Aug. 31, 2015
Real Estate Investment Trust
Operating expense
Dec. 28, 2014
Real Estate Investment Trust
Operating expense
Dec. 28, 2014
Real Estate Investment Trust
Sales leaseback agreement
Oct. 6, 2014
Real Estate Investment Trust
Sales leaseback agreement
restaurant
Dec. 27, 2015
Real Estate Investment Trust
Sales leaseback agreement
Accrued liabilities
Dec. 27, 2015
Real Estate Investment Trust
Sales leaseback agreement
Other liabilities
Oct. 6, 2014
Real Estate Investment Trust
Sales leaseback agreement
Bagger Dave's
restaurant
Oct. 6, 2014
Real Estate Investment Trust
Sales leaseback agreement
BWW
restaurant
Dec. 28, 2014
Real Estate Investment Trust
Property closed under sale leaseback agreement
Aug. 31, 2015
Real Estate Investment Trust
Property closed under sale leaseback agreement
Oct. 6, 2014
Real Estate Investment Trust
Property closed under sale leaseback agreement
restaurant
Significant Business Transactions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sale of common stock from follow-on public offering, net of fees and expenses (in shares)
6,900,000 
 
 
 
140,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sale of common stock from follow-on public offering price per share (in dollars per share)
 
 
 
 
 
$ 5.00 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from sale of common stock, net of underwriter fees
$ 31,900,000 
$ 0 
$ 0 
$ 31,982,679 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sale leaseback transaction value
 
 
 
 
 
 
 
 
 
 
24,600,000 
 
 
 
 
 
 
 
 
 
 
 
Number of restaurants
 
80 
 
 
 
 
18 
62 
 
 
 
 
 
 
12 
 
 
 
10 
Sale leaseback transaction total proceeds
 
 
 
 
 
 
 
 
5,600,000 
 
 
 
 
 
 
 
 
 
 
19,100,000 
 
 
Impairment and loss on asset disposals
 
 
 
 
 
 
 
 
 
 
 
400,000 
500,000 
 
 
 
 
 
 
 
 
 
Deferred gains on properties sold
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,300,000 
 
$ 200,000 
$ 2,000,000 
 
 
 
 
 
Lease term
 
 
 
 
 
 
 
 
 
15 years 
 
 
 
 
 
 
 
 
 
 
 
 
Number of renewal options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal term
 
 
 
 
 
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
ACQUISITIONS - Florida (Details) (USD $)
0 Months Ended 6 Months Ended
Dec. 27, 2015
restaurant
Dec. 28, 2014
Jun. 30, 2014
Screamin' Hot
Dec. 28, 2014
Screamin' Hot
Jun. 30, 2014
Screamin' Hot
Dec. 27, 2015
BWW
restaurant
Dec. 27, 2015
Clearwater, Port Richey, and Oldsmar, Florida
BWW
restaurant
Jun. 30, 2014
Clearwater, Port Richey, and Oldsmar, Florida
BWW
Screamin' Hot
restaurant
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
Number of restaurants
80 
 
 
 
 
62 
15 
Purchase price of acquisition
 
 
$ 3,200,000 
 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
 
 
 
 
 
 
 
Working capital
 
 
 
 
57,600 
 
 
 
Property and equipment
 
 
 
 
656,146 
 
 
 
Franchise fees
 
 
 
 
72,750 
 
 
 
Goodwill
50,097,081 
10,998,630 
 
 
2,419,854 
 
 
 
Net Cash paid for acquisition
 
 
 
 
3,206,350 
 
 
 
Revenue
 
 
 
3,100,000 
 
 
 
 
Net loss
 
 
 
$ 135,796 
 
 
 
 
ACQUISITIONS - St. Louis (Details) (USD $)
0 Months Ended 6 Months Ended
Dec. 27, 2015
restaurant
Dec. 28, 2014
Dec. 27, 2015
BWW
restaurant
Dec. 27, 2015
BWW
Missouri
restaurant
Jun. 29, 2015
A Sure Wing, LLC
Dec. 27, 2015
A Sure Wing, LLC
Jun. 29, 2015
A Sure Wing, LLC
Jun. 29, 2015
A Sure Wing, LLC
BWW
restaurant
Jun. 29, 2015
A Sure Wing, LLC
BWW
Missouri
restaurant
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
Number of restaurants
80 
 
62 
15 
 
 
 
18 
15 
Purchase price of acquisition
 
 
 
 
$ 54,000,000 
 
 
 
 
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
 
 
 
 
 
 
 
 
 
Working capital
 
 
 
 
 
 
413,232 
 
 
Fixed assets
 
 
 
 
 
 
13,993,000 
 
 
Intangible assets
 
 
 
 
 
 
505,000 
 
 
Favorable lease
 
 
 
 
 
 
112,344 
 
 
Unfavorable lease
 
 
 
 
 
 
(58,797)
 
 
Goodwill
50,097,081 
10,998,630 
 
 
 
 
39,098,451 
 
 
Net Cash paid for acquisition
 
 
 
 
 
 
54,063,230 
 
 
Revenue
 
 
 
 
 
20,900,000 
 
 
 
Net income
 
 
 
 
 
$ 25,095 
 
 
 
ACQUISITIONS - Pro Forma Financial Information (Details) (A Sure Wing, LLC, USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
A Sure Wing, LLC
 
 
Business Acquisition [Line Items]
 
 
Revenue
$ 193,481,326 
$ 168,221,665 
Net income (loss)
$ (15,250,523)
$ 684,575 
Basic earnings (loss) per share (in dollars per share)
$ (0.58)
$ 0.03 
Diluted earnings (loss) per share (in dollars per share)
$ (0.58)
$ 0.03 
IMPAIRMENTS, DISPOSALS AND EXIT COSTS (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Restructuring Cost and Reserve [Line Items]
 
 
 
Charges
$ 1,414,308 
 
 
Losses on other asset disposal
1,500,000 
1,000,000 
100,000 
Facility Closing
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
Number of restaurants closed
12 
 
 
Charges
10,900,000 
 
 
Fix and intangible assets held for sale
900,000 
 
 
Property and equipment impairments
 
Indiana |
Facility Closing
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
Number of restaurants closed
 
 
Michigan |
Facility Closing
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
Number of restaurants closed
 
 
Florida |
Facility Closing
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
Number of restaurants closed
 
 
Bagger Dave's
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
Property and equipment impairments
$ 2,800,000 
 
 
Number of restaurants underperforming
 
 
IMPAIRMENTS, DISPOSALS AND EXIT COSTS - Restructuring Reserve Rollforward (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Restructuring Reserve [Roll Forward]
 
Beginning of the year
$ 0 
Charges
1,414,308 
Cash payments
(75,122)
End of the year
$ 1,339,186 
INVESTMENTS - Investments (Details) (USD $)
Dec. 28, 2014
Dec. 29, 2013
Debt securities:
 
 
Amortized Cost
$ 2,922,995 
 
Unrealized Gains
236 
Unrealized Loss
(5,763)
(44,442)
Estimated Fair Value
2,917,232 
 
Obligations of states/municipals
 
 
Debt securities:
 
 
Amortized Cost
1,190,261 
 
Unrealized Gains
 
Unrealized Loss
(4,278)
 
Estimated Fair Value
1,185,983 
 
Corporate securities
 
 
Debt securities:
 
 
Amortized Cost
1,732,734 
 
Unrealized Gains
 
Unrealized Loss
(1,485)
 
Estimated Fair Value
$ 1,731,249 
 
INVESTMENTS - Gross Unrealized Gains and Losses on Available for Sales Securities (Details) (USD $)
12 Months Ended
Dec. 28, 2014
Dec. 29, 2013
Investments, Debt and Equity Securities [Abstract]
 
 
Unrealized gain
$ 0 
$ 236 
Unrealized loss
(5,763)
(44,442)
Net unrealized loss
(5,763)
(44,206)
Deferred federal income tax benefit
1,959 
15,030 
Net unrealized loss on investments, net of deferred income tax
$ (3,804)
$ (29,176)
PROPERTY AND EQUIPMENT, NET - Property and Equipment (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Property, Plant and Equipment [Line Items]
 
 
Total
$ 117,400,343 
$ 103,839,004 
Less accumulated depreciation
(38,210,682)
(32,330,054)
Property and equipment, net
79,189,661 
71,508,950 
Land
 
 
Property, Plant and Equipment [Line Items]
 
 
Total
37,500 
3,087,514 
Building
 
 
Property, Plant and Equipment [Line Items]
 
 
Total
2,339,219 
2,339,219 
Equipment
 
 
Property, Plant and Equipment [Line Items]
 
 
Total
32,912,992 
29,251,119 
Furniture and fixtures
 
 
Property, Plant and Equipment [Line Items]
 
 
Total
8,194,060 
7,458,292 
Leasehold improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Total
72,148,545 
56,971,815 
Restaurant construction in progress
 
 
Property, Plant and Equipment [Line Items]
 
 
Total
$ 1,768,027 
$ 4,731,045 
PROPERTY AND EQUIPMENT, NET - Narratives (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Property, Plant and Equipment [Abstract]
 
 
 
Depreciation expense
$ 16.6 
$ 10.9 
$ 7.9 
Restaurant construction in progress
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Subject to sales leaseback transaction
 
$ 2.2 
 
INTANGIBLE ASSETS - Intangible Assets (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Amortized intangible assets
 
 
Franchise fees
$ 1,278,142 
$ 647,363 
Trademark
66,826 
64,934 
Non-compete
76,560 
76,560 
Favorable operating leases
351,344 
239,000 
Loan fees
751,070 
130,377 
Total
2,523,942 
1,158,234 
Less accumulated amortization
(557,527)
(377,839)
Amortized intangible assets, net
1,966,415 
780,395 
Unamortized intangible assets
 
 
Liquor licenses
2,017,618 
2,136,103 
Total intangible assets, net
$ 3,984,033 
$ 2,916,498 
INTANGIBLE ASSETS - Narratives (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
Amortization expense
$ 102,736 
$ 62,008 
$ 55,469 
Loan fees written off to interest expense
$ 117,339 
$ 308,497 
$ 76,407 
Weighted-average amortization period
11 years 110 days 
 
 
OTHER ACCRUED LIABILITIES (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Payables and Accruals [Abstract]
 
 
Sales tax payable
$ 987,795 
$ 770,938 
Accrued interest
495,365 
138,538 
Closure liability - current
1,008,707 
Other
1,171,344 
448,034 
Total accrued other liabilities
$ 3,663,211 
$ 1,357,510 
RELATED PARTY TRANSACTIONS (Details) (Director, USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Director
 
 
 
Related Party Transaction [Line Items]
 
 
 
Fees for monthly accounting and financial statement services
$ 596,856 
$ 515,948 
$ 405,187 
Unpaid accounting and financial statement services fees
$ 14,631 
$ 900 
 
LONG-TERM DEBT - Schedule of Long-Term Debt (Details) (USD $)
Dec. 27, 2015
Sep. 27, 2015
Dec. 28, 2014
Debt Instrument [Line Items]
 
 
 
Unamortized discount
$ (322,349)
$ (322,349)
$ 0 
Total debt
126,601,307 
 
61,768,399 
Less current portion
(9,918,827)
 
(8,155,903)
Long-term debt, net of current portion
116,682,480 
 
53,612,496 
Term Loan |
June 2020 Term Loan
 
 
 
Debt Instrument [Line Items]
 
 
 
Notes payable
115,833,333 
 
Term Loan |
December 2014 Term Loan
 
 
 
Debt Instrument [Line Items]
 
 
 
Notes payable
 
56,000,000 
Line of Credit |
June 2020 DLOC
 
 
 
Debt Instrument [Line Items]
 
 
 
Notes payable
11,090,323 
 
   
Line of Credit |
December 2014 DLOC
 
 
 
Debt Instrument [Line Items]
 
 
 
Notes payable
$ 0 
 
$ 5,768,399 
LONG-TERM DEBT - Schedule of Long-Term Debt Phantom (Details) (USD $)
0 Months Ended 12 Months Ended
Jun. 29, 2015
Dec. 16, 2014
December 2014 Term Loan
Dec. 16, 2014
December 2014 DLOC
Jun. 29, 2015
Term Loan
Jun. 29, 2015
Term Loan
Dec. 27, 2015
Term Loan
June 2020 Term Loan
Dec. 27, 2015
Term Loan
June 2020 DLOC
Dec. 27, 2015
Term Loan
December 2014 Term Loan
Dec. 28, 2014
Term Loan
December 2014 Term Loan
Dec. 27, 2015
Line of Credit
December 2014 DLOC
Dec. 28, 2014
Line of Credit
December 2014 DLOC
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
$ 155,000,000.0 
$ 56,000,000.0 
$ 20,000,000.0 
 
$ 120,000,000.0 
$ 120,000,000.0 
$ 30,000,000.0 
$ 0 
$ 56,000,000.0 
$ 0 
$ 20,000,000.0 
Monthly principal payment
 
 
 
$ 833,333 
 
$ 833,333 
 
$ 0 
$ 666,667 
 
 
Interest rate range, low
 
 
 
2.25% 
 
2.25% 
2.25% 
0.00% 
2.25% 
0.00% 
2.25% 
Interest rate range, high
 
 
 
3.50% 
 
3.50% 
3.50% 
0.00% 
3.15% 
0.00% 
3.15% 
Interest rate at end of period
 
 
 
 
 
3.86% 
3.86% 
0.00% 
2.70% 
0.00% 
2.70% 
LONG-TERM DEBT - Narratives (Details) (USD $)
9 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Sep. 27, 2015
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Jun. 29, 2015
Dec. 16, 2014
December 2014 Senior Secured Credit Facility
Dec. 16, 2014
December 2014 Term Loan
Dec. 27, 2015
December 2014 Term Loan
Dec. 16, 2014
December 2014 Term Loan
Dec. 16, 2014
December 2014 Term Loan
LIBOR
Minimum
Dec. 16, 2014
December 2014 Term Loan
LIBOR
Maximum
Dec. 16, 2014
December 2014 DLOC
Dec. 28, 2014
December 2014 DLOC
Dec. 16, 2014
December 2014 DLOC
Dec. 16, 2014
December 2014 RLOC
Dec. 16, 2014
December 2014 RLOC
Dec. 16, 2014
Refinance existing outstanding debt
December 2014 Term Loan
Dec. 16, 2014
Refinance outstanding balance DLOC
December 2014 Term Loan
Jun. 29, 2015
Term Loan
Jun. 29, 2015
Term Loan
Dec. 27, 2015
Term Loan
December 2014 Term Loan
Dec. 28, 2014
Term Loan
December 2014 Term Loan
Dec. 27, 2015
Line of Credit
December 2014 DLOC
Dec. 28, 2014
Line of Credit
December 2014 DLOC
Jun. 29, 2015
Development Line of Credit
Line of Credit
Dec. 27, 2015
Development Line of Credit
Line of Credit
Jun. 29, 2015
Development Line of Credit
Line of Credit
Jun. 29, 2015
Revolving Credit Facility
Jun. 29, 2015
Revolving Credit Facility
Senior Secured Credit Facility
Dec. 16, 2014
RBS
Term Loan
December 2014 Term Loan
Dec. 16, 2014
RBS
Line of Credit
December 2014 DLOC
Sep. 27, 2015
Interest Rate Swaps
agreement
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
$ 155,000,000.0 
$ 77,000,000.0 
 
 
$ 56,000,000.0 
 
 
 
 
$ 20,000,000.0 
 
$ 1,000,000.0 
 
 
 
$ 120,000,000.0 
$ 0 
$ 56,000,000.0 
$ 0 
$ 20,000,000.0 
 
 
$ 30,000,000.0 
 
$ 5,000,000.0 
 
 
 
Total debt
 
126,601,307 
61,768,399 
 
 
 
 
 
 
 
 
 
 
 
 
 
35,500,000 
20,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of debt instrument
 
 
 
 
 
 
5 years 
 
 
 
 
2 years 
 
 
2 years 
 
 
 
5 years 
 
 
 
 
 
2 years 
 
 
5 years 
 
 
 
 
Debt instrument payment term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12 years 
 
 
 
 
 
 
 
 
 
 
84 months 
84 months 
 
Scheduled monthly principal and interest payments
 
 
 
 
 
 
 
666,667 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basis spread on variable rate (as a percent)
 
 
 
 
 
 
 
 
 
2.25% 
3.15% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments to refinance outstanding debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
65,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase price of acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
54,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments of Financing Costs
 
751,071 
249,116 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500,000 
 
 
 
 
 
 
 
 
 
 
500,000 
 
 
Accrued interest payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
833,333 
 
666,667 
 
 
 
 
 
 
 
 
 
 
Interest rate range, low
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.25% 
 
0.00% 
2.25% 
0.00% 
2.25% 
 
 
 
 
 
 
 
 
Interest rate range, high
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.50% 
 
0.00% 
3.15% 
0.00% 
3.15% 
 
 
 
 
 
 
 
 
Unamortized discount
322,349 
322,349 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Issuance Cost
674,955 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
$ 4,211,255 
$ 2,274,041 
$ 1,718,711 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of interest rate swap agreements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LONG-TERM DEBT - Principal Maturities of Long-Term Debt (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Debt Disclosure [Abstract]
 
 
2016
$ 9,918,827 
 
2017
10,480,330 
 
2018
11,042,033 
 
2019
11,047,760 
 
2020
84,112,357 
 
Thereafter
 
Total debt
$ 126,601,307 
$ 61,768,399 
LONG-TERM DEBT - Fair Values of Derivative Instruments (Details) (Cash Flow Hedging, USD $)
Dec. 27, 2015
Dec. 28, 2014
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Notional amounts
$ 100,696,875 
$ 38,452,382 
Derivative assets
3,119 
Derivative liabilities
1,525,255 
262,745 
April 2012
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Rate
1.40% 
1.40% 
Notional amounts
7,619,048 
9,904,762 
Derivative assets
Derivative liabilities
56,280 
73,492 
October 2012
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Rate
0.90% 
0.90% 
Notional amounts
3,214,286 
4,071,429 
Derivative assets
3,119 
Derivative liabilities
3,027 
July 2013
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Rate
1.40% 
1.40% 
Notional amounts
8,190,476 
11,619,048 
Derivative assets
Derivative liabilities
60,164 
106,061 
May 2014
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Rate
1.54% 
1.54% 
Notional amounts
11,428,571 
12,857,143 
Derivative assets
Derivative liabilities
122,716 
83,192 
January 2015
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Rate
1.82% 
 
Notional amounts
20,547,619 
 
Derivative assets
 
Derivative liabilities
415,459 
 
August 2015
 
 
Derivative Instruments and Hedging Activities Disclosures [Line Items]
 
 
Rate
2.30% 
 
Notional amounts
49,696,875 
 
Derivative assets
 
Derivative liabilities
$ 867,609 
 
STOCK-BASED COMPENSATION - Stock-based Compensation Narrative (Details) (Stock Incentive Plan)
12 Months Ended
Dec. 27, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of shares authorized
750,000 
Employee Stock Option
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Expiration period
10 years 
Employee Stock Option |
Minimum
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Percentage of fair market value exercise price awarded
100.00% 
Restricted stock
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Percentage of fair market value exercise price awarded
100.00% 
Vesting period
3 years 
Restricted stock |
Minimum
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Vesting period
1 year 
STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) (USD $)
1 Months Ended 12 Months Ended 12 Months Ended
Aug. 31, 2015
Director
Jul. 30, 2010
Director
Jul. 30, 2007
Director
Dec. 29, 2013
Director
Dec. 27, 2015
Director
Dec. 28, 2014
Director
Dec. 27, 2015
Stock Incentive Plan
Restricted stock
Dec. 28, 2014
Stock Incentive Plan
Restricted stock
Dec. 29, 2013
Stock Incentive Plan
Restricted stock
Dec. 27, 2015
Stock Incentive Plan
Restricted stock
Tranche One
Dec. 27, 2015
Stock Incentive Plan
Restricted stock
Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Weighted-average grant date fair value (in dollars per share)
 
 
 
 
 
 
$ 3.56 
$ 4.82 
$ 5.85 
 
 
Percentage of fair market value exercise price awarded
 
 
 
 
 
 
100.00% 
 
 
 
 
Vesting period
 
 
3 years 
 
 
 
3 years 
 
 
3 years 
1 year 
Unrecognized stock-based compensation expense
 
 
 
 
 
 
$ 559,509 
 
 
 
 
Weighted-average vesting period
 
 
 
 
 
 
1 year 328 days 
 
 
 
 
Total fair value of shares vested
 
 
 
 
 
 
197,045 
193,996 
169,593 
 
 
Number of shares available for future awards (in shares)
 
 
 
 
 
 
365,051 
 
 
 
 
Granted options (in shares)
 
210,000 
150,000 
 
 
 
 
 
 
 
 
Exercise price (in dollars per share)
$ 2.50 
$ 2.50 
$ 2.50 
 
 
 
 
 
 
 
 
Expiration period
 
6 years 
6 years 
 
 
 
 
 
 
 
 
Stock options exercised (in shares)
30,000 
 
 
150,000 
 
 
 
 
 
 
 
Stock options exercised in period exercised price (in dollars per share)
 
 
 
$ 2.50 
 
 
 
 
 
 
 
Intrinsic value of options exercised
6,300 
 
 
679,680 
 
 
 
 
 
 
 
Number of reserved shares of common stock for future issuance (in shares)
 
 
 
 
180,000 
 
 
 
 
 
 
Intrinsic value of outstanding options
 
 
 
$ 514,500 
$ 19,800 
$ 522,900 
 
 
 
 
 
STOCK-BASED COMPENSATION - Restricted Shares Transactions (Details) (Restricted stock)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Restricted stock
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
Unvested at beginning of period (in shares)
164,867 
116,667 
54,900 
Granted (in shares)
131,752 
91,966 
145,575 
Vested (in shares)
(45,521)
(41,031)
(26,700)
Vested shares tax portion (in shares)
(1,387)
 
 
Expired/Forfeited (in shares)
(8,587)
(2,735)
(57,108)
Unvested at end of period (in shares)
241,124 
164,867 
116,667 
STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) (Employee Stock Purchase Plan)
12 Months Ended
Dec. 27, 2015
offering_period
Dec. 28, 2014
Dec. 29, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Number of reserved shares of common stock for future issuance (in shares)
250,000 
 
 
Number of offering period
 
 
Number of shares issued under employee stock purchase plan
21,623 
11,015 
4,624 
Number of shares available for future awards (in shares)
212,589 
 
 
Maximum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Percentage of fair market value exercise price awarded
85.00% 
 
 
STOCK-BASED COMPENSATION - Share Repurchase Program (Details) (USD $)
1 Months Ended 12 Months Ended
Apr. 30, 2015
Dec. 27, 2015
Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Authorized repurchase amount (up to)
 
 
$ 1,000,000.0 
Amount repurchased of outstanding shares
$ 98,252 
$ 98,252 
 
Number of shares repurchases in outstanding shares (in shares)
24,500 
 
 
Weighted average purchase price per share (in dollars per share)
$ 4.01 
 
 
STOCK-BASED COMPENSATION - Stock-based Compensation (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Equity [Abstract]
 
 
 
Stock-based compensation
$ 424,414 
$ 338,810 
$ 278,290 
STOCK-BASED COMPENSATION - Preferred Stock (Details) (USD $)
Dec. 27, 2015
Equity [Abstract]
 
Authorized shares of preferred stock (in shares)
10,000,000 
Preferred stock par value (in dollars per share)
$ 0.0001 
Preferred shares issued (in shares)
INCOME TAXES - Income Tax Benefit Components (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Federal
 
 
 
Current
$ 0 
$ 0 
$ 0 
Deferred
(9,073,787)
(1,628,568)
(306,951)
State
 
 
 
Current
127,312 
74,773 
Deferred
(912,220)
(205,480)
(29,272)
Income tax benefit
$ (9,986,007)
$ (1,706,736)
$ (261,450)
INCOME TAXES - Income Tax Benefit Reconciliation (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Income Tax Disclosure [Abstract]
 
 
 
Income tax benefit at federal statutory rate
$ (8,900,690)
$ (1,011,580)
$ (43,228)
State income tax, net of federal benefit
(912,221)
(51,689)
30,032 
Permanent differences
1,219,947 
346,388 
271,151 
Tax credits
(1,393,043)
(989,855)
(519,405)
Income tax benefit
$ (9,986,007)
$ (1,706,736)
$ (261,450)
INCOME TAXES - Deferred Income Tax Assets and Liabilities (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Deferred tax assets:
 
 
Net operating loss carry-forwards
$ 7,368,309 
$ 915,900 
Deferred rent expense
505,995 
481,543 
Start-up costs
138,832 
99,261 
Tax credit carry-forwards
4,810,760 
3,417,716 
Interest rate swaps
518,589 
88,121 
Investments
1,959 
Sale leaseback deferred gain
734,744 
788,195 
Stock-based compensation
457,680 
310,790 
Accrued closure liabilities
455,324 
Other
835,018 
397,117 
Total deferred tax assets
15,825,251 
6,500,602 
Deferred tax liabilities:
 
 
Tax depreciation in excess of book
1,296,243 
3,069,315 
Goodwill amortization in excess of book
1,208,831 
470,647 
Total deferred tax liability
2,505,074 
3,539,962 
Net deferred income tax assets
$ 13,320,177 
$ 2,960,640 
INCOME TAXES - Narratives (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Note 10 - Income Taxes (Details) [Line Items]
 
 
Operating loss and general business tax credit carryforwards expiration period
20 years 
 
General business tax credits
$ 4,800,000 
 
Accrued interest amounts or penalties related to uncertain tax positions
Stock-based compensation tax deductions
 
 
Note 10 - Income Taxes (Details) [Line Items]
 
 
Operating loss carryforwards
600,000 
 
Earliest tax year |
General business tax credits
 
 
Note 10 - Income Taxes (Details) [Line Items]
 
 
Tax credit carryforward, expiration year
2028 
 
Latest tax year |
General business tax credits
 
 
Note 10 - Income Taxes (Details) [Line Items]
 
 
Tax credit carryforward, expiration year
2035 
 
Internal Revenue Service (IRS) |
Domestic tax authority
 
 
Note 10 - Income Taxes (Details) [Line Items]
 
 
Operating loss carryforwards
21,400,000 
 
State and Local Jurisdiction |
Domestic tax authority
 
 
Note 10 - Income Taxes (Details) [Line Items]
 
 
Operating loss carryforwards
$ 17,600,000 
 
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
12 Months Ended 1 Months Ended 12 Months Ended
Dec. 27, 2015
restaurant
Dec. 28, 2014
Dec. 29, 2013
Oct. 31, 2015
Violations of fair labor standards act and minimum wage laws
Dec. 29, 2013
Advertising fund contribution expenses
Dec. 27, 2015
Certain cities
Minimum
Dec. 27, 2015
Certain cities
Maximum
Dec. 27, 2015
Original number of restaurants required
restaurant
Dec. 27, 2015
Open restaurants
restaurant
Dec. 27, 2015
Restaurants required
restaurant
Dec. 27, 2015
Additional franchise agreements
restaurant
Dec. 31, 2020
Exclusive of potential additional restaurant acquisitions
Forecast
restaurant
Other Commitments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Number of restaurants
80 
 
 
 
 
 
 
42 
27 
42 
15 
77 
Royalty percentage of net sales
5.00% 
 
 
 
 
 
 
 
 
 
 
 
Advertising fund contribution expense (as a percent)
3.00% 
 
 
 
 
0.25% 
0.50% 
 
 
 
 
 
Royalty expense
$ 7,200,000 
$ 5,300,000 
$ 4,700,000 
 
 
 
 
 
 
 
 
 
Advertising expenses
4,600,000 
3,500,000 
2,800,000 
 
 
 
 
 
 
 
 
 
Modernization cost for a restaurant low range
50,000 
 
 
 
 
 
 
 
 
 
 
 
Modernization cost for a restaurant high range
1,300,000 
 
 
 
 
 
 
 
 
 
 
 
Percentage of employer matching contribution of first 3.0%
 
 
100.00% 
 
 
 
 
 
 
 
 
 
Percentage of employer matching contribution of remaining 2.0%
 
 
50.00% 
 
 
 
 
 
 
 
 
 
Discretionary matching percentage of eligible team members contributions
100.00% 
100.00% 
 
 
 
 
 
 
 
 
 
 
Discretionary matching percentage of eligible team members gross pay matched
2.00% 
2.00% 
 
 
 
 
 
 
 
 
 
 
Matching contributions amount
156,472 
168,446 
 
 
250,001 
 
 
 
 
 
 
 
Settlement amount
 
 
 
$ 1,900,000 
 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 27, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 28, 2014
Sep. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Earnings Per Share [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Income (loss) available to common stockholders
 
 
 
 
 
 
 
 
$ (16,192,492)
$ (1,268,497)
$ 134,308 
Weighted-average shares outstanding (in shares)
26,294,530 
26,251,621 
26,151,853 
26,149,184 
26,147,287 
26,107,627 
26,067,958 
26,048,805 
26,211,669 
26,092,919 
23,937,188 
Effect of dilutive securities (in shares)
 
 
 
 
 
 
 
 
120,884 
Weighted-average shares outstanding - assuming dilution (in shares)
26,294,530 
26,251,261 
26,151,853 
26,248,424 
26,147,287 
26,107,627 
26,067,958 
26,153,595 
26,211,669 
26,092,919 
24,058,072 
Earnings per common share (in dollars per share)
$ (0.36)
$ (0.14)
$ (0.13)
$ 0.01 
$ (0.05)
$ (0.01)
$ 0.00 
$ 0.01 
$ (0.62)
$ (0.05)
$ 0.01 
Earnings per common share - assuming dilution (in dollars per share)
$ (0.36)
$ (0.14)
$ (0.13)
$ 0.01 
$ (0.05)
$ (0.01)
$ 0.00 
$ 0.01 
$ (0.62)
$ (0.05)
$ 0.01 
SUPPLEMENTAL CASH FLOWS INFORMATION (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Property, Plant and Equipment [Line Items]
 
 
 
Cash paid for interest
$ 3,100,000 
$ 1,900,000 
$ 1,700,000 
Cash paid for income taxes
94,290 
22,000 
65,500 
Property and equipment
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Noncash investing transactions not yet paid
$ 500,000 
$ 3,100,000 
$ 1,900,000 
FAIR VALUE OF FINANCIAL INSTRUMENTS - Narratives (Details) (USD $)
Dec. 27, 2015
Dec. 28, 2014
Fair Value Disclosures [Abstract]
 
 
Total debt
$ 126,601,307 
$ 61,768,399 
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) (Fair value measured on a recurring basis, USD $)
Dec. 27, 2015
Dec. 28, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
$ 2,000,000 
 
Interest rate swaps
(1,525,255)
(259,626)
Debt securities
 
 
Total debt securities
 
2,917,232 
Total
474,745 
2,657,606 
Obligations of states/municipals
 
 
Debt securities
 
 
Total debt securities
 
1,185,983 
Corporate securities
 
 
Debt securities
 
 
Total debt securities
 
1,731,249 
Level 1
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
2,000,000 
 
Interest rate swaps
Debt securities
 
 
Total debt securities
 
Total
2,000,000 
Level 1 |
Obligations of states/municipals
 
 
Debt securities
 
 
Total debt securities
 
Level 1 |
Corporate securities
 
 
Debt securities
 
 
Total debt securities
 
Level 2
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
 
Interest rate swaps
(1,525,255)
(259,626)
Debt securities
 
 
Total debt securities
 
2,917,232 
Total
(1,525,255)
2,657,606 
Level 2 |
Obligations of states/municipals
 
 
Debt securities
 
 
Total debt securities
 
1,185,983 
Level 2 |
Corporate securities
 
 
Debt securities
 
 
Total debt securities
 
1,731,249 
Level 3
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
 
Interest rate swaps
Debt securities
 
 
Total debt securities
 
Total
Level 3 |
Obligations of states/municipals
 
 
Debt securities
 
 
Total debt securities
 
Level 3 |
Corporate securities
 
 
Debt securities
 
 
Total debt securities
 
$ 0 
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $)
12 Months Ended
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Beginning balance
$ (175,156)
$ (245,364)
$ (284,294)
Gain (loss) recorded to other comprehensive income
(1,260,020)
106,376 
58,984 
Tax benefit (expense)
428,509 
(36,168)
(20,054)
Total other comprehensive income (loss)
(831,511)
70,208 
38,930 
Accumulated OCL
(1,006,667)
(175,156)
(245,364)
Investments
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Beginning balance
(3,804)
(29,176)
Gain (loss) recorded to other comprehensive income
5,763 
38,443 
(44,206)
Tax benefit (expense)
(1,959)
(13,071)
15,030 
Total other comprehensive income (loss)
3,804 
25,372 
(29,176)
Accumulated OCL
(3,804)
(29,176)
Interest Rate Swaps
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Beginning balance
(171,352)
(216,188)
(284,294)
Gain (loss) recorded to other comprehensive income
(1,265,783)
67,933 
103,190 
Tax benefit (expense)
430,468 
(23,097)
(35,084)
Total other comprehensive income (loss)
(835,315)
44,836 
68,106 
Accumulated OCL
$ (1,006,667)
$ (171,352)
$ (216,188)
SUMMARY QUARTERLY FINANCIAL DATA (unaudited) (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 27, 2015
Sep. 27, 2015
Jun. 28, 2015
Mar. 29, 2015
Dec. 28, 2014
Sep. 28, 2014
Jun. 29, 2014
Mar. 30, 2014
Dec. 27, 2015
Dec. 28, 2014
Dec. 29, 2013
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 49,095,392 
$ 47,077,816 
$ 36,871,838 
$ 39,440,332 
$ 35,148,721 
$ 32,782,092 
$ 30,009,621 
$ 30,473,014 
$ 172,485,378 
$ 128,413,448 
$ 108,886,139 
Operating profit (loss)
(14,748,104)
(3,140,137)
(5,509,546)
608,504 
(1,897,168)
185,059 
291,659 
778,170 
(22,789,283)
(642,280)
1,440,277 
Income (loss) before income taxes
(16,082,158)
(4,948,302)
(5,341,323)
193,284 
(2,880,455)
(230,209)
(179,368)
314,799 
(26,178,499)
(2,975,233)
(127,142)
Net income (loss)
$ (9,555,256)
$ (3,581,535)
$ (3,318,343)
$ 262,642 
$ (1,353,749)
$ (182,109)
$ (100,496)
$ 367,857 
$ (16,192,492)
$ (1,268,497)
$ 134,308 
Basic earnings per share (in dollars per share)
$ (0.36)
$ (0.14)
$ (0.13)
$ 0.01 
$ (0.05)
$ (0.01)
$ 0.00 
$ 0.01 
$ (0.62)
$ (0.05)
$ 0.01 
Fully diluted earnings per share (in dollars per share)
$ (0.36)
$ (0.14)
$ (0.13)
$ 0.01 
$ (0.05)
$ (0.01)
$ 0.00 
$ 0.01 
$ (0.62)
$ (0.05)
$ 0.01 
Weighted average number of common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
Basic (in shares)
26,294,530 
26,251,621 
26,151,853 
26,149,184 
26,147,287 
26,107,627 
26,067,958 
26,048,805 
26,211,669 
26,092,919 
23,937,188 
Diluted (in shares)
26,294,530 
26,251,261 
26,151,853 
26,248,424 
26,147,287 
26,107,627 
26,067,958 
26,153,595 
26,211,669 
26,092,919 
24,058,072