0.995
9.74
576370
71596000
18991000
249924000
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28710070
287000
28710070
287000
238473000
238473000
71596000
4555000
28712622
28712622
200000000
5.23
0.01
3472539
7240000
1410000
58779000
63404000
38859000
5723000
334000
1114000
22000
8041000
2313000
287000
9883000
-175029000
30240000
25646000
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239329000
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4230000
417898000
35092000
257000
3153000
3010000
353311000
8000000
7546000
229000
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21487000
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249924000
64808000
3539000
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63297000
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128212000
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417898000
244000
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-30574000
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4518000
431000
1688000
136000000
530000
61888000
11074000
28854000
934000
1106000
2312000
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1.81
71468000
42868000
0
690000
13186000
-175029000
-175029000
28712622
287000
28712622
287000
239329000
239329000
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6038000
120700000
61888000
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10000000
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200000000
0.01
287000
-175029000
239329000
64587000
64587000
4480000
64587000
60107000
4480000
28712622
28712622
5.31
3338096
200000000
5.31
1709748
5.36
0
0.01
100000000
0.01
3338096
187190000
7825000
99038000
570000
65110000
1114000
258000
320000
69620000
0
78248000
38973000
7357000
322000
847000
27000
4182000
2777000
287000
172000
12316000
-191902000
15431000
31623000
26315000
1703000
416000
240151000
48536000
1396000
8044000
4635000
159360000
13851000
15982000
416942000
37019000
1614000
265000
3597000
3190000
17203000
368406000
8594000
6648000
267000
0
1900000
18645000
289200000
32387000
199000
249000
17015000
-322000
234000
860000
249324000
68641000
5906000
131000
13900000
70184000
2123000
500000
5859000
621000
138261000
7100000
1884000
54960000
4605000
1898000
3284000
416942000
180000
413000
-31945000
-31623000
5074000
442000
157000
19000
1655000
123000000
351000
530000
61888000
8703000
27272000
287000
1045000
934000
1927000
12.72
1.81
119000
0.148
0.11
0.25
5521037
503124
2062448
158000
139000
24300000
2400000
136
133
2
39295000
416500000
367964000
416500000
26830000
595000
72000
101000
116000
354000
84000
704000
72000
215000
1004000
115000
244000
511000
28000
84000
300000
7300000
15000000
7700000
78181000
46079000
0
815000
13186000
-191902000
-191902000
28712622
287000
28712622
287000
240151000
240151000
-1927000
-9156000
-225000
-651000
-296000
-144000
-228000
-7229000
-383000
5104000
106000
934000
97000
305000
140000
156000
130000
6038000
120700000
61888000
58812000
7800000
233
168
962000
728000
2.69
2.98
533551
1057279
5.36
5.31
1709748
3338095
12.71
12.71
65950
123113
6.20
6.02
1110247
2157703
1900000
182400000
190000000
1900000
1900000
1900000
189090000
910000
100000000
100000000
99038000
962000
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28712622
28712622
200000000
0.01
287000
-191902000
240151000
48536000
48536000
4394000
48536000
44142000
4394000
0.125
0.045
12500000
0.0150
170000000
5100000
0.0150
12500000
0.17
105000000
3200000
100
15
200000000
0.01
200000000
0.01
200000000
0.01
100000000
0.01
300000000
15.00
22418000
15000000
8100000
1000000
190000000
100000000
0.17
0.17
0.0100
950000
0.0100
36929835
36929835
200000000
0
1393742
0.01
100000000
0.01
3554926
185907000
13811000
73764000
0
45118000
691000
2236000
369000
14716000
-154014000
1703000
352977000
199332000
1638000
44337000
5463000
477025000
868000
3946000
4178000
277693000
7419000
6750000
222000
0
1900000
188700000
41825000
2300000
248674000
79806000
5720000
125000
3258000
28014000
153570000
1884000
477025000
142000
577000
1626000
61888000
4555000
53131000
815000
4170000
1640000
35949000
330000
2062442
1300000
52000
45000
19900000
7600000
12
8
7300000
15000000
7700000
86985000
48813000
5449000
12323000
239
166
768000
0.11
0.45
2014-04-22
("Old Holdings") entered into the following reorganization transactions (i) Old Holdings merged with and into CSC with CSC continuing as the surviving corporation; (ii) CSC merged with and into CAC with CAC continuing as the surviving corporation and (iii) CAC renamed itself El Pollo Loco Holdings, Inc.
0.0550
0.0650
425000
2017-07
0.0675
0.0775
2016-07
2018-01-10
2018-01
P10Y
P10Y
P5Y
8.56381-for-1
8.56381
8.56381-for-1
8.56381
8214286
112300000
2014-07-14
0.85
33000000
11000000
1071429
100000000
3300000
5100000
3200000
2018-01
4600000
3200000
2000000
0.0025
2017-07
2017-07
0.0750
0.0850
14400000
2018-10
0.0025
0.0325
0.0425
0.11
0.43
0.04
852173
12528000
29564795
0.04
218356
28712622
168000
1219000
-91000
-50000
1979000
3273000
-734000
29000
32716000
-686000
238489000
1275000
10169000
1268000
26380000
15430000
223059000
562000
1979000
-1459000
29443000
205773000
1538000
2930000
-3000
343000
4854000
931000
57260000
2005000
15000
70608000
7600000
7570000
-1443000
-3499000
-10154000
175659000
126000
18754000
2150000
81000
191000
0
-159000
45000
47791000
0.80
465000000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Basis of Presentation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We have prepared the accompanying interim unaudited condensed
consolidated financial statements pursuant to the rules and
regulations of the Securities and Exchange Commission (the
“SEC”). Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles in the United States (“GAAP”) for complete
financial statements. In our opinion, all adjustments considered
necessary for the fair presentation of our results of operations,
financial position, and cash flows for the periods presented have
been included and are of a normal, recurring nature. The results of
operations for interim periods are not necessarily indicative of
the results to be expected for a full year. These financial
statements should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 25,
2013.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We use a 52- or 53-week fiscal year ending on the last Wednesday of
the calendar year. In a 52-week fiscal year, each quarter includes
13 weeks of operations; in a 53-week fiscal year, the first, second
and third quarters each include 13 weeks of operations and the
fourth quarter includes 14 weeks of operations. Every six or seven
years a 53-week fiscal year occurs. Fiscal 2013, which was a
52-week year, ended on December 25, 2013. Fiscal 2014, which
is a <font style="WHITE-SPACE: nowrap">53-week</font> year, will
end on December 31, 2014. Because fiscal 2014 is a 53-week
year, both revenues and expenses, and other financial and
operational figures, may be on an elevated scale compared with
52-week periods both before and after.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On July 14, 2014, we amended our certificate of incorporation
to increase our authorized share count to 200,000,000 shares of
common stock, par value $0.01 per share, and split our stock
8.56381:1. On July 24, 2014, we amended and restated our
certificate of incorporation to, among other things, increase our
authorized share count to 300,000,000 shares of stock, including
200,000,000 shares of common stock and 100,000,000 shares of
preferred stock, each par value $0.01 per share. On July 30,
2014, we completed our initial public offering of 8,214,286 shares
of common stock at a price to the public of $15.00 per share (the
“IPO”), including 1,071,429 shares sold to the
underwriters pursuant to their option to purchase additional
shares. After underwriting discounts, commissions, and fees and
expenses of IPO offering and distribution, we received net IPO
proceeds of approximately $112.3 million. We used these proceeds
primarily to repay in whole a $100 million second lien term loan
(the “Second Lien Term Loan”). All share and per-share
data herein have been adjusted to reflect the 8.56381 for 1 common
stock split effected on July 14, 2014 as though it had
occurred prior to the earliest data presented.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The accompanying condensed consolidated financial statements
include the accounts of Holdings and its wholly-owned subsidiaries.
All intercompany balances and transactions have been eliminated in
consolidation.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>7. COMMITMENTS AND CONTINGENCIES</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>Legal Matters</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
Around February 24, 2014, a former employee filed a class
action in the Superior Court of the State of California, County of
Orange, against EPL on behalf of all putative class members (all
hourly employees from 2010 to the present) alleging certain
violations of California labor laws, including failure to pay
overtime compensation, failure to provide meal periods and rest
breaks, and failure to provide itemized wage statements. The
putative lead plaintiff’s requested remedies included
compensatory and punitive damages, injunctive relief, disgorgement
of profits, and reasonable attorneys’ fees and costs. No
specific amount of damages sought was specified in the complaint.
We were served with the complaint on March 3, 2014. While we
intend to vigorously defend against this action, including its
class certification, its ultimate outcome is presently not
determinable, as it is in a preliminary phase. Thus, we cannot
determine the likelihood of an adverse judgment nor a likely range
of damages, if any. A settlement or adverse judgment could have a
material adverse impact.</p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We are involved in various claims and legal actions that arise in
the ordinary course of business. We do not believe that the
ultimate resolution of these actions will have a material adverse
effect on our financial position, results of operations, liquidity,
or capital resources. A significant increase in the number of
claims or an increase in amounts payable under successful claims
could materially adversely affect our business, financial
condition, results of operations or cash flows.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>Purchasing Commitments</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We have long-term beverage supply agreements with certain major
beverage vendors. Pursuant to the terms of these arrangements,
marketing rebates are provided to us and our franchisees from
beverage vendors based upon dollar volumes of purchases
system-wide, which vary with demand for and the price of syrup. Our
contracts extend so far as 2017, and our estimated obligations
under them total $19.9 million.</p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We have two supplier contracts for chicken that terminate in
December 2014 and January 2015. We entered into these agreements in
December 2013 at costs comparable to those of the contracts that
preceded them. At September 24, 2014, our estimated
obligations under them totaled $7.6 million.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>Contingent Lease Obligations</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We are contingently liable for two leases that we assigned to
franchisees. The latest lease expires in 2015. At
September 24, 2014, our maximum exposure was $52,000, or
$45,000, if discounted at our estimated pre-tax cost of debt. In
the event of a franchisee default, we could cross-default the
franchisee under its franchise agreement. We believe that
cross-default provisions reduce our risk of payments, and we have
not recorded any liability in our condensed consolidated financial
statements related to these liabilities.</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>Employment Agreements</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We have at-will employment agreements with four of our officers.
These agreements provide for minimum salary levels, possible annual
adjustments for cost-of-living changes, and incentive bonuses
payable under certain conditions.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>Indemnification Agreements</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We have entered into indemnification agreements with each of our
current directors and executive officers. These agreements require
us to indemnify them to the fullest extent permitted under Delaware
law against liabilities that may arise by reason of their service
to us, and to advance expenses incurred as a result of any
proceeding against them where they could be indemnified. We also
intend to enter into indemnification agreements with our future
directors and executive officers.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>4. CREDIT AGREEMENTS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On October 11, 2013, we refinanced our debt (the “2013
Refinancing”), entering into (i) the First Lien Credit
Agreement, including a $190 million senior secured term loan (the
“First Lien Term Loan”) and the Revolver, each maturing
in October 2018, and (ii) a new second lien credit agreement
(the “Second Lien Credit Agreement”), including the
Second Lien Term Loan. The proceeds received from the term loans
were used to pay off our prior credit agreements, including our
senior secured first lien credit facility due July 2017 and our 17%
second priority senior secured notes due January 2018.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Loans under the First Lien Credit Agreement bear interest, at
EPL’s option, at LIBOR or an Alternate Base Rate, plus an
applicable margin of 4.25% with respect to LIBOR and 3.25% with
respect to the Alternate Base Rate, with a 1.00% floor with respect
to LIBOR. The First Lien Term Loan was issued at a discount of
$950,000, and this discount is being accreted over the term of the
loan, using the effective interest method. The unamortized discount
at September 24, 2014, is $768,000. The First Lien Term Loan
requires quarterly principal payments of 0.25%, commencing on
March 26, 2014. The First Lien Term Loan and the Revolver are
secured by a first priority lien on substantially all of the assets
of EPL and of EPL Intermediate, Inc. (“Intermediate”),
EPL’s direct parent.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Revolver provides a $15 million revolving line of credit. At
September 24, 2014, $7.3 million in letters of credit were
outstanding, and $7.7 million was available to borrow.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Loans under the Second Lien Credit Agreement bore interest, at
EPL’s option, at LIBOR or an Alternate Base Rate, plus an
applicable margin of 8.50% with respect to LIBOR and 7.50% with
respect to the Alternate Base Rate, with a 1.00% floor with respect
to LIBOR. The Second Lien Term Loan was issued at a discount of
$1.0 million, and this discount was accreted over the term of the
loan, using the effective interest method. Following our IPO, we
fully repaid the Second Lien Term Loan. In conjunction with the
repayment of the Second Lien Term Loan, we incurred an
extinguishment of debt charge of $5.1 million, consisting of $1.5
million in call premium, $2.7 million related to the write-off of
remaining unamortized deferred finance costs, and $0.9 million
relating to the write-off of the unamortized discount.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The First Lien Credit Agreement contains a number of negative and
financial covenants, including, among others, the following (all
subject to certain exceptions): a maximum total leverage ratio
covenant, a minimum interest coverage ratio covenant, and
limitations on indebtedness, liens, investments, asset sales,
mergers, consolidations, liquidations and dissolutions, restricted
payments, and negative pledges. The First Lien Credit Agreement
also contains certain customary affirmative covenants and events of
default. At September 24, 2014, we were in compliance with all
covenants.</p>
</div>
1.13
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>8. NET INCOME PER SHARE</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Basic net income per share is calculated using the weighted-average
number of shares of common stock outstanding during the thirteen
and thirty-nine weeks ended September 24, 2014, and
September 25, 2013. Diluted net income per share is calculated
using the weighted-average number of shares of common stock
outstanding and potentially dilutive during the period, using the
treasury stock method.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Below are our basic and diluted net income per share data for the
periods indicated, which are in thousands except for per share
data.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="47%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><b>Thirteen Weeks
Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><b>Thirty-Nine Weeks
Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 24,<br />
2014</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 25,<br />
2013</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 24,<br />
2014</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 25,<br />
2013</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Numerator:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">25,849</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">918</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">37,888</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,268</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Denominator:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding - basic</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,221,829</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,549,979</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding - diluted</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">37,171,670</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">29,564,795</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">33,499,820</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">29,564,795</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income per share - basic</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.76</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.03</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1.24</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.04</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income per share - diluted</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">0.70</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">0.03</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1.13</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">0.04</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Anti-dilutive securities not considered in diluted EPS
calculation</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">218,356</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">218,356</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Below is a reconciliation of basic and diluted share counts.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="44%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><b>Thirteen Weeks
Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><b>Thirty-Nine Weeks
Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 24,<br />
2014</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 25,<br />
2013</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 24,<br />
2014</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 25,<br />
2013</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding - basic</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,221,829</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,549,979</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Dilutive effect of stock options</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">2,949,841</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">852,173</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">2,949,841</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">852,173</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding - diluted</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">37,171,670</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">29,564,795</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">33,499,820</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">29,564,795</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Goodwill and Indefinite Lived Intangible Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Our indefinite lived intangible assets consist of trademarks.
Goodwill represents the excess of cost over fair value of net
identified assets acquired in business combinations accounted for
under the purchase method. We do not amortize our goodwill and
indefinite lived intangible assets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Upon the sale of a restaurant, we decrement goodwill. The amount of
goodwill that we include in the cost basis of the asset sold is
determined based on the relative fair value of the reporting unit
disposed of as a percentage of the fair value of the reporting unit
retained.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We perform annual impairment tests for goodwill during the fourth
fiscal quarter of each year, or more frequently if impairment
indicators arise.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We review goodwill for impairment utilizing either a qualitative
assessment or a two-step process. If we decide that it is
appropriate to perform a qualitative assessment and conclude that
the fair value of a reporting unit more likely than not exceeds its
carrying value, no further evaluation is necessary. If we perform
the two-step process, the first step of the goodwill impairment
test is used to identify potential impairment by comparing the fair
value of a reporting unit with its carrying amount, including
goodwill. If the fair value of a reporting unit exceeds its
carrying amount, goodwill of the reporting unit is considered not
impaired and the second step of the impairment test is unnecessary.
If the carrying amount of a reporting unit exceeds its fair value,
the second step is performed to measure the amount of impairment by
comparing the carrying amount of the goodwill to a determination of
the implied value of the goodwill. If the carrying amount of
goodwill is greater than the implied value, an impairment charge is
recognized for the difference.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We perform annual impairment tests for indefinite lived intangible
assets during the fourth fiscal quarter of each year, or more
frequently if impairment indicators arise. An impairment test
consists of either a qualitative assessment or a comparison of the
fair value of an intangible asset with its carrying amount. The
excess of the carrying amount of an intangible asset over its fair
value is its impairment loss.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
We did not identify any indicators of potential impairment during
the thirty-nine weeks ended September 24, 2014, and therefore
did not perform any impairment review.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Below is a reconciliation of basic and diluted share counts.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="44%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><b>Thirteen Weeks
Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><b>Thirty-Nine Weeks
Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 24,<br />
2014</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 25,<br />
2013</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 24,<br />
2014</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 25,<br />
2013</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding - basic</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,221,829</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,549,979</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Dilutive effect of stock options</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">2,949,841</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">852,173</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">2,949,841</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">852,173</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding - diluted</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">37,171,670</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">29,564,795</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">33,499,820</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">29,564,795</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
S-1
El Pollo Loco Holdings, Inc.
LOCO
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Overview</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
El Pollo Loco Holdings, Inc. (“Holdings”) is a Delaware
corporation headquartered in Costa Mesa, California. Holdings and
its direct and indirect subsidiaries are collectively known as
“we,” “us” or the “Company.”
Our activities are conducted principally through our indirect
wholly-owned subsidiary, El Pollo Loco, Inc. (“EPL”),
which develops, franchises, licenses, and operates quick-service
restaurants under the name El Pollo Loco<sup style="FONT-SIZE: 85%; VERTICAL-ALIGN: top">®</sup> and operates
under one business segment. At September 24, 2014, we operated
166 and franchised 239 El Pollo Loco restaurants.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Basis of Presentation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We have prepared the accompanying interim unaudited condensed
consolidated financial statements pursuant to the rules and
regulations of the Securities and Exchange Commission (the
“SEC”). Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles in the United States (“GAAP”) for complete
financial statements. In our opinion, all adjustments considered
necessary for the fair presentation of our results of operations,
financial position, and cash flows for the periods presented have
been included and are of a normal, recurring nature. The results of
operations for interim periods are not necessarily indicative of
the results to be expected for a full year. These financial
statements should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 25,
2013.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We use a 52- or 53-week fiscal year ending on the last Wednesday of
the calendar year. In a 52-week fiscal year, each quarter includes
13 weeks of operations; in a 53-week fiscal year, the first, second
and third quarters each include 13 weeks of operations and the
fourth quarter includes 14 weeks of operations. Every six or seven
years a 53-week fiscal year occurs. Fiscal 2013, which was a
52-week year, ended on December 25, 2013. Fiscal 2014, which
is a <font style="WHITE-SPACE: nowrap">53-week</font> year, will
end on December 31, 2014. Because fiscal 2014 is a 53-week
year, both revenues and expenses, and other financial and
operational figures, may be on an elevated scale compared with
52-week periods both before and after.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On July 14, 2014, we amended our certificate of incorporation
to increase our authorized share count to 200,000,000 shares of
common stock, par value $0.01 per share, and split our stock
8.56381:1. On July 24, 2014, we amended and restated our
certificate of incorporation to, among other things, increase our
authorized share count to 300,000,000 shares of stock, including
200,000,000 shares of common stock and 100,000,000 shares of
preferred stock, each par value $0.01 per share. On July 30,
2014, we completed our initial public offering of 8,214,286 shares
of common stock at a price to the public of $15.00 per share (the
“IPO”), including 1,071,429 shares sold to the
underwriters pursuant to their option to purchase additional
shares. After underwriting discounts, commissions, and fees and
expenses of IPO offering and distribution, we received net IPO
proceeds of approximately $112.3 million. We used these proceeds
primarily to repay in whole a $100 million second lien term loan
(the “Second Lien Term Loan”). All share and per-share
data herein have been adjusted to reflect the 8.56381 for 1 common
stock split effected on July 14, 2014 as though it had
occurred prior to the earliest data presented.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The accompanying condensed consolidated financial statements
include the accounts of Holdings and its wholly-owned subsidiaries.
All intercompany balances and transactions have been eliminated in
consolidation.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Use of Estimates</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The preparation of financial statements in conformance with GAAP
requires us to make estimates and assumptions that affect
(i) the reported amounts of assets and liabilities, and
disclosures of contingent assets and liabilities, at the date of
the financial statements, and (ii) revenue and expenses during
the period reported. Actual results could materially differ from
those estimates. Our significant estimates include estimates for
(i) impairment of goodwill, intangible assets and plant and
equipment, (ii) insurance reserves, (iii) lease
termination liabilities, (iv) stock-based compensation, and
(v) income tax valuation allowances.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 18pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Reclassifications</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Certain comparative prior year amounts in the condensed
consolidated financial statements and accompanying notes have been
reclassified to conform to the current year presentation. These
reclassifications have no effect on previously-reported net
income.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Liquidity</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Our principal liquidity requirements are to service our debt and to
meet capital expenditure needs. At September 24, 2014, our
total debt was $188.7 million. Our ability to make payments on our
indebtedness and to fund planned capital expenditures depends on
available cash and on our ability to generate adequate cash flows
in the future, which, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory, and
other factors that are beyond our control. Based on current
operations, we believe that our cash flow from operations,
available cash of $41.8 million at September 24, 2014, and
available borrowings under our $15 million senior secured revolving
credit facility (the “Revolver”) (which availability
was approximately $7.7 million at September 24, 2014) will be
adequate to meet our liquidity needs for the next 12 months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Concentration of Risk</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We have two suppliers for which amounts due at September 24,
2014, and December 25, 2013, totaled 43% and 45% and 11% and
11%, respectively, of our accounts payable. Purchases from the same
suppliers accounted for the majority of our purchases for the
periods ended September 24, 2014, and September 25, 2013.
Company-operated and franchised restaurants in the greater Los
Angeles area generated, in the aggregate, approximately 79% and 80%
of revenue for the thirteen weeks ended September 24, 2014,
and September 25, 2013 respectively, and approximately 80% for
the thirty-nine weeks ended September 24, 2014, and
September 25, 2013.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Goodwill and Indefinite Lived Intangible Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Our indefinite lived intangible assets consist of trademarks.
Goodwill represents the excess of cost over fair value of net
identified assets acquired in business combinations accounted for
under the purchase method. We do not amortize our goodwill and
indefinite lived intangible assets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Upon the sale of a restaurant, we decrement goodwill. The amount of
goodwill that we include in the cost basis of the asset sold is
determined based on the relative fair value of the reporting unit
disposed of as a percentage of the fair value of the reporting unit
retained.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We perform annual impairment tests for goodwill during the fourth
fiscal quarter of each year, or more frequently if impairment
indicators arise.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We review goodwill for impairment utilizing either a qualitative
assessment or a two-step process. If we decide that it is
appropriate to perform a qualitative assessment and conclude that
the fair value of a reporting unit more likely than not exceeds its
carrying value, no further evaluation is necessary. If we perform
the two-step process, the first step of the goodwill impairment
test is used to identify potential impairment by comparing the fair
value of a reporting unit with its carrying amount, including
goodwill. If the fair value of a reporting unit exceeds its
carrying amount, goodwill of the reporting unit is considered not
impaired and the second step of the impairment test is unnecessary.
If the carrying amount of a reporting unit exceeds its fair value,
the second step is performed to measure the amount of impairment by
comparing the carrying amount of the goodwill to a determination of
the implied value of the goodwill. If the carrying amount of
goodwill is greater than the implied value, an impairment charge is
recognized for the difference.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We perform annual impairment tests for indefinite lived intangible
assets during the fourth fiscal quarter of each year, or more
frequently if impairment indicators arise. An impairment test
consists of either a qualitative assessment or a comparison of the
fair value of an intangible asset with its carrying amount. The
excess of the carrying amount of an intangible asset over its fair
value is its impairment loss.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
We did not identify any indicators of potential impairment during
the thirty-nine weeks ended September 24, 2014, and therefore
did not perform any impairment review.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b><i>Gain on Sale of Restaurants</i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On September 24, 2014, we completed an agreement to sell six
company-operated restaurants in the greater San Antonio area
to AA Pollo, Inc., resulting in cash proceeds of $5.4 million.
Goodwill was decremented by $650,000, based on a calculation of the
fair value of the restaurants sold as a percentage of the relative
fair value of the remainder of the reporting units retained. We
recognized a net gain of $2.7 million on this transaction, which is
recorded as a gain on sale of restaurants in the accompanying
statement of operations. These six restaurants will now be
franchised. In addition, in connection with the sale, AA Pollo,
Inc., entered into an exclusive development agreement with us to
develop and open eight restaurants in the greater San Antonio area.
We have also agreed to an additional exclusive franchise
development agreement with AA Pollo, Inc., for the development of
twelve restaurants in the Houston area.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Income Taxes</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Provision for income taxes, income taxes payable, and deferred
income taxes are determined using the asset and liability method.
Deferred tax assets and liabilities are determined based on
temporary differences between the financial carrying amounts and
the tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the temporary differences are expected
to reverse. On a periodic basis, we assess the probability that our
net deferred tax assets, if any, will be recovered. If, after
evaluating all of the positive and negative evidence, we conclude
that it is more likely than not that some or all of our net
deferred tax assets will not be recovered, we provide for a
valuation allowance by charging to tax expense to reserve the
portion of deferred tax assets that we do not expect to be
realized. At December 25, 2013, we maintained a full valuation
allowance against our deferred tax assets. After evaluating all of
the positive and negative evidence, including our continued
profitability and the reduction in interest expense resulting from
the 2013 Refinancing (as defined below), our completed initial
public offering and the resultant payoff of the Second Lien Term
Loan, we concluded that it is more likely than not that our net
deferred tax assets will be recovered. As a result, during the
quarter ending September 24, 2014, we released our valuation
allowance of approximately $65 million. In addition, during the
quarter, we applied for various tax credits that resulted in
$5.4 million of additional deferred tax assets and tax
benefits.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We review our filing positions for all open tax years in all U.S.
federal and state jurisdictions where we are required to file.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
When there are uncertainties related to potential income tax
benefits, in order to qualify for recognition, the position we take
has to have at least a “more likely than not” chance of
being sustained (based on the position’s technical merits)
upon challenge by the respective authorities. The term “more
likely than not” means a likelihood of more than 50 percent.
Otherwise, we may not recognize any of the potential tax benefit
associated with the position. We recognize a benefit for a tax
position that meets the “more likely than not”
criterion at the largest amount of tax benefit that is greater than
50 percent likely of being realized upon its effective resolution.
Unrecognized tax benefits involve our judgment regarding the
likelihood of the benefit being sustained. The final resolution of
uncertain tax positions could result in adjustments to recorded
amounts and may affect our results of operations, financial
position, and cash flows.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
We recognize interest and penalties related to income tax matters
in income tax expense. We had no accrual for interest or penalties
at September 24, 2014, or at December 25, 2013, and did
not recognize interest or penalties during the thirteen and
thirty-nine weeks ended September 24, 2014, and
September 25, 2013, respectively, since we had no material
unrecognized tax benefits. We do not anticipate material changes in
our amount of unrecognized tax benefits within the next twelve
months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On July 30, 2014, we entered into an Income Tax Receivable
Agreement (the “TRA”). The TRA calls for us to pay to
our pre-IPO stockholders 85% of the savings in cash that we realize
in our taxes as a result of utilizing our net operating losses and
other tax attributes attributable to preceding periods. In
connection with the TRA, we have amended our first lien credit
agreement (the “First Lien Credit Agreement”) to permit
dividend payments to us by our subsidiaries in amounts up to $11
million per fiscal year, not to exceed $33 million in the
aggregate, while the First Lien Credit Agreement is outstanding.
During the quarter, we incurred a charge of approximately $40
million relating to the present value of our total expected TRA
payments.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Franchise Development Option Agreement</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On July 11, 2014, EPL and Trimaran Pollo Partners, L.L.C.
(“LLC”) entered into a Franchise Development Option
Agreement relating to development of our restaurants in the New
York–Newark, NY–NJ–CT–PA Combined
Statistical Area (the “Territory”). EPL granted LLC the
exclusive option to develop and open fifteen restaurants in the
Territory over five years (the “Initial Option”), and,
provided that the Initial Option is exercised, the exclusive option
to develop and open up to an additional one hundred restaurants in
the Territory over ten years. The Franchise Development Option
Agreement terminates (i) ten years after execution, or
(ii) if the Initial Option is exercised, five years after that
exercise. LLC may only exercise the Initial Option if EPL first
determines to begin development of company-operated restaurants in
the Territory or support the development of the Territory. We have
no current intention to begin development in the Territory.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>Income Taxes</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
Provision for income taxes, income taxes payable, and deferred
income taxes are determined using the asset and liability method.
Deferred tax assets and liabilities are determined based on
temporary differences between the financial carrying amounts and
the tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the temporary differences are expected
to reverse. On a periodic basis, we assess the probability that our
net deferred tax assets, if any, will be recovered. If, after
evaluating all of the positive and negative evidence, we conclude
that it is more likely than not that some or all of our net
deferred tax assets will not be recovered, we provide for a
valuation allowance by charging to tax expense to reserve the
portion of deferred tax assets that we do not expect to be
realized. At December 25, 2013, we maintained a full valuation
allowance against our deferred tax assets. After evaluating all of
the positive and negative evidence, including our continued
profitability and the reduction in interest expense resulting from
the 2013 Refinancing (as defined below), our completed initial
public offering and the resultant payoff of the Second Lien Term
Loan, we concluded that it is more likely than not that our net
deferred tax assets will be recovered. As a result, during the
quarter ending September 24, 2014, we released our valuation
allowance of approximately $65 million. In addition, during the
quarter, we applied for various tax credits that resulted in
$5.4 million of additional deferred tax assets and tax
benefits.</p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We review our filing positions for all open tax years in all U.S.
federal and state jurisdictions where we are required to file.</p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
When there are uncertainties related to potential income tax
benefits, in order to qualify for recognition, the position we take
has to have at least a “more likely than not” chance of
being sustained (based on the position’s technical merits)
upon challenge by the respective authorities. The term “more
likely than not” means a likelihood of more than 50 percent.
Otherwise, we may not recognize any of the potential tax benefit
associated with the position. We recognize a benefit for a tax
position that meets the “more likely than not”
criterion at the largest amount of tax benefit that is greater than
50 percent likely of being realized upon its effective resolution.
Unrecognized tax benefits involve our judgment regarding the
likelihood of the benefit being sustained. The final resolution of
uncertain tax positions could result in adjustments to recorded
amounts and may affect our results of operations, financial
position, and cash flows.</p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We recognize interest and penalties related to income tax matters
in income tax expense. We had no accrual for interest or penalties
at September 24, 2014, or at December 25, 2013, and did
not recognize interest or penalties during the thirteen and
thirty-nine weeks ended September 24, 2014, and
September 25, 2013, respectively, since we had no material
unrecognized tax benefits. We do not anticipate material changes in
our amount of unrecognized tax benefits within the next twelve
months.</p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
On July 30, 2014, we entered into an Income Tax Receivable
Agreement (the “TRA”). The TRA calls for us to pay to
our pre-IPO stockholders 85% of the savings in cash that we realize
in our taxes as a result of utilizing our net operating losses and
other tax attributes attributable to preceding periods. In
connection with the TRA, we have amended our first lien credit
agreement (the “First Lien Credit Agreement”) to permit
dividend payments to us by our subsidiaries in amounts up to $11
million per fiscal year, not to exceed $33 million in the
aggregate, while the First Lien Credit Agreement is outstanding.
During the quarter, we incurred a charge of approximately $40
million relating to the present value of our total expected TRA
payments.</p>
</div>
Non-accelerated Filer
P1Y2M12D
2949841
29842000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other noncurrent liabilities consist of the following, in
thousands.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>September 24,<br />
2014</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    6,750</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    6,648</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
TRA payable</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">35,949</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">1,638</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,396</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total noncurrent liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">44,337</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">8,044</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>9. RELATED PARTY TRANSACTIONS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%">
Trimaran Capital, L.L.C., and Freeman Spogli & Co.
indirectly beneficially own shares sufficient for majority control
over all matters requiring stockholder votes, including elections
of directors, mergers, consolidations, acquisitions, sales of all
or substantially all of our assets, other decisions affecting our
capital structure, amendments to our certificate of incorporation
or by-laws, and our winding up and dissolution. Furthermore, so
long as our their investment vehicle, owns a majority of our common
stock, they can appoint the members of our board of directors.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On November 18, 2005, we entered into a Monitoring and
Management Services Agreement with Trimaran Fund Management, LLC,
providing for annual fees of $500,000 and reasonable expenses.
During the thirteen and thirty-nine weeks ended September 24,
2014, and September 25, 2013, $51,000 and $142,000 and
$343,000 and $465,000, respectively, were paid under the agreement,
and accounted for as general and administrative expenses. In
connection with the IPO, we have terminated the agreement.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>5. OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other accrued expenses and current liabilities consist of the
following, in thousands.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>September 24,<br />
2014</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Accrued sales and property taxes</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    4,178</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    3,190</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
TRA payable</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">4,170</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">5,463</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,635</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total other accrued expenses and current liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">13,811</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">7,825</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>6. OTHER NONCURRENT LIABILITIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other noncurrent liabilities consist of the following, in
thousands.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>September 24,<br />
2014</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    6,750</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    6,648</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
TRA payable</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">35,949</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">1,638</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,396</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total noncurrent liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">44,337</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">8,044</td>
</tr>
</table>
</div>
2161184
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Use of Estimates</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The preparation of financial statements in conformance with GAAP
requires us to make estimates and assumptions that affect
(i) the reported amounts of assets and liabilities, and
disclosures of contingent assets and liabilities, at the date of
the financial statements, and (ii) revenue and expenses during
the period reported. Actual results could materially differ from
those estimates. Our significant estimates include estimates for
(i) impairment of goodwill, intangible assets and plant and
equipment, (ii) insurance reserves, (iii) lease
termination liabilities, (iv) stock-based compensation, and
(v) income tax valuation allowances.</p>
</div>
2014-09-24
1
false
33499820
1.24
-650000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Below are our basic and diluted net income per share data for the
periods indicated, which are in thousands except for per share
data.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="47%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><b>Thirteen Weeks
Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><b>Thirty-Nine Weeks
Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 24,<br />
2014</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 25,<br />
2013</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 24,<br />
2014</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>September 25,<br />
2013</b></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Numerator:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">25,849</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">918</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">37,888</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,268</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Denominator:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding - basic</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">34,221,829</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">30,549,979</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,712,622</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted-average shares outstanding - diluted</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">37,171,670</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">29,564,795</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">33,499,820</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">29,564,795</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income per share - basic</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.76</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.03</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1.24</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">0.04</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net income per share - diluted</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">0.70</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">0.03</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1.13</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">0.04</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Anti-dilutive securities not considered in diluted EPS
calculation</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">218,356</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">218,356</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
0001606366
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>3. STOCK-BASED COMPENSATION</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
At September 24, 2014, options to purchase 3,554,926 shares of
common stock were outstanding, including 2,161,184 vested and
1,393,742 unvested. Unvested options vest over time, or upon our
achieving annual financial goals. However, upon a change in
control, the board may accelerate vesting. At September 24,
2014, 2,062,442 premium options remained outstanding. For the
thirty-nine weeks ended September 24, 2014, there was one
exercise of stock options for 739 shares. In connection with the
completion of our IPO, we granted options to purchase 223,183
shares of our common stock with an exercise price of $15.00, the
IPO price and fair market value as of the date of grant, to
selected employees who are not our executive officers. We expect to
incur approximately $1.3 million of stock-based compensation
expense in connection with these grants, which we will expense over
four years.</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
In addition, in connection with the completion of our IPO, we
granted two of our directors restricted grants for 3,333 shares
each, equivalent to $50,000 divided by our public offering price.
These grants vest based on continued service over three years.
Based on our share price when the grants were consummated, we
expect to incur approximately $330,000 of stock-based compensation
expense as the grants vest.</p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
At September 24, 2014, we had total unrecognized compensation
expense of $2.3 million, related to unvested stock options and
restricted shares, which we expect to recognize over a
weighted-average period of 1.2 years.</p>
</div>
(i) the First Lien Credit Agreement, including a $190 million senior secured term loan (the "First Lien Term Loan") and the Revolver, each maturing in October 2018, and (ii) a new second lien credit agreement (the "Second Lien Credit Agreement"), including the Second Lien Term Loan.
Around February 24, 2014
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>2. PROPERTY AND EQUIPMENT</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Below are costs and related accumulated depreciation and
amortization of major classes of property, in thousands.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="61%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>September 24,<br />
2014</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,323</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,186</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings and improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">86,985</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">78,181</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other property and equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">48,813</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">46,079</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Construction in progress</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5,449</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">815</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
      153,570</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
      138,261</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated depreciation and amortization</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(73,764</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(69,620</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">79,806</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">68,641</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Depreciation expense was $2.9 million and $2.6 million and $8.3
million and $7.6 million for the thirteen and thirty-nine weeks
ended September 24, 2014, and September 25, 2013,
respectively. The gross value of assets under capital leases was
$1.8 million at September 24, 2014, and $1.9 million at
December 25, 2013, and corresponding accumulated depreciation
was $1.7 million for both periods. For the thirteen weeks ended
September 24, 2014, capital expenditures totaled $8.6 million,
including $2.2 million for restaurant remodeling, $5.0 million for
new restaurant expenditures, and $1.4 million for other corporate
capital requirements. For the thirty-nine weeks ended
September 24, 2014, capital expenditures totaled $19.0
million, including $7.6 million for restaurant remodeling, $8.1
million for new restaurant expenditures, and $3.3 million for other
corporate capital requirements.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>Concentration of Risk</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
We have two suppliers for which amounts due at September 24,
2014, and December 25, 2013, totaled 43% and 45% and 11% and
11%, respectively, of our accounts payable. Purchases from the same
suppliers accounted for the majority of our purchases for the
periods ended September 24, 2014, and September 25, 2013.
Company-operated and franchised restaurants in the greater Los
Angeles area generated, in the aggregate, approximately 79% and 80%
of revenue for the thirteen weeks ended September 24, 2014,
and September 25, 2013 respectively, and approximately 80% for
the thirty-nine weeks ended September 24, 2014, and
September 25, 2013.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Liquidity</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Our principal liquidity requirements are to service our debt and to
meet capital expenditure needs. At September 24, 2014, our
total debt was $188.7 million. Our ability to make payments on our
indebtedness and to fund planned capital expenditures depends on
available cash and on our ability to generate adequate cash flows
in the future, which, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory, and
other factors that are beyond our control. Based on current
operations, we believe that our cash flow from operations,
available cash of $41.8 million at September 24, 2014, and
available borrowings under our $15 million senior secured revolving
credit facility (the “Revolver”) (which availability
was approximately $7.7 million at September 24, 2014) will be
adequate to meet our liquidity needs for the next 12 months.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other accrued expenses and current liabilities consist of the
following, in thousands.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>September 24,<br />
2014</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Accrued sales and property taxes</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    4,178</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    3,190</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
TRA payable</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">4,170</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">5,463</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,635</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total other accrued expenses and current liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">13,811</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">7,825</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Reclassifications</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Certain comparative prior year amounts in the condensed
consolidated financial statements and accompanying notes have been
reclassified to conform to the current year presentation. These
reclassifications have no effect on previously-reported net
income.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Below are costs and related accumulated depreciation and
amortization of major classes of property, in thousands.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="61%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>September 24,<br />
2014</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,323</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,186</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings and improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">86,985</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">78,181</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other property and equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">48,813</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">46,079</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Construction in progress</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5,449</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">815</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
      153,570</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
      138,261</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated depreciation and amortization</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(73,764</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(69,620</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">79,806</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">68,641</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
739
30549979
8100000
201000
19000000
215000
1512000
1215000
-491000
-29000
-186000
-22514000
-609000
3300000
7600000
161000
37973000
-568000
254888000
101425000
19414000
37888000
15705000
16456000
238432000
-5082000
2658000
2857000
-60536000
-1202000
15286000
219573000
1173000
2827000
-27000
349000
250000
24810000
59552000
-60402000
5435000
75834000
8300000
8271000
8947000
112300000
649000
-13979000
186477000
415000
20974000
-457000
353000
635000
0
-168000
62000
51091000
27000
40119000
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b><i>Gain on Sale of Restaurants</i></b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
On September 24, 2014, we completed an agreement to sell six
company-operated restaurants in the greater San Antonio area
to AA Pollo, Inc., resulting in cash proceeds of $5.4 million.
Goodwill was decremented by $650,000, based on a calculation of the
fair value of the restaurants sold as a percentage of the relative
fair value of the remainder of the reporting units retained. We
recognized a net gain of $2.7 million on this transaction, which is
recorded as a gain on sale of restaurants in the accompanying
statement of operations. These six restaurants will now be
franchised. In addition, in connection with the sale, AA Pollo,
Inc., entered into an exclusive development agreement with us to
develop and open eight restaurants in the greater San Antonio area.
We have also agreed to an additional exclusive franchise
development agreement with AA Pollo, Inc., for the development of
twelve restaurants in the Houston area.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
<b>Franchise Development Option Agreement</b></p>
<p style="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">
On July 11, 2014, EPL and Trimaran Pollo Partners, L.L.C.
(“LLC”) entered into a Franchise Development Option
Agreement relating to development of our restaurants in the New
York–Newark, NY–NJ–CT–PA Combined
Statistical Area (the “Territory”). EPL granted LLC the
exclusive option to develop and open fifteen restaurants in the
Territory over five years (the “Initial Option”), and,
provided that the Initial Option is exercised, the exclusive option
to develop and open up to an additional one hundred restaurants in
the Territory over ten years. The Franchise Development Option
Agreement terminates (i) ten years after execution, or
(ii) if the Initial Option is exercised, five years after that
exercise. LLC may only exercise the Initial Option if EPL first
determines to begin development of company-operated restaurants in
the Territory or support the development of the Territory. We have
no current intention to begin development in the Territory.</p>
</div>
2
3333
P3Y
50000
2015-01
2014-12
P4Y
223183
15.00
2
0.80
2
2015
2
4
The Franchise Development Option Agreement terminates (i) ten years after execution, or (ii) if the Initial Option is exercised, five years after that exercise.
2005-11-18
343000000
500000000
6
1512000
-5082000
2700000
900000
1.18
-0.385
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19409000
0.127
3190019
28712194
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0.052
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285757
4.77
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0.350
8093
4000
1600000
100000
216000
856000
-473000
185000
-1032000
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186000
26000
33052000
-966000
293610000
1700000
14993000
3489000
-7865000
28710000
18682000
860000
274928000
326000
42000
1999000
1131000
38890000
260558000
2118000
986000
3647000
1000
1170000
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6264000
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73406000
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18331000
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85428000
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28000
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24451000
765000
418000
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-275000
1013000
42000
61636000
836402
0.60
0.00
P5Y9M
0.0102
P3Y
0.390
0.13
0.15
0.51
0.13
2
0.81
320000
2118000
-7865000
-7865000
2552
2552
4000
860000
4000
860000
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14100000
366000
612000000
1063343
2126677
5.84
-75000
28712194
-0.27
15000
-935000
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-950000
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860000
950000
-75000
950000
7790000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Advertising Costs</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Advertising expense is recorded as the obligation to contribute to
the advertising fund is created, generally when the associated
revenue is recognized. Advertising expense, which is a component of
occupancy and other operating expenses, was $11.9 million and $11.2
million for the years ended December 25, 2013 and
December 26, 2012, respectively, and is net of $15.8 million
and $14.1 million, respectively, funded by the franchisees’
advertising fees.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Franchisees pay a monthly fee to the Company that ranges from 4% to
5% of their restaurants’ net sales as reimbursement for
advertising, public relations and promotional services the Company
provides. Fees received in advance of provided services are
included in other accrued expenses and current liabilities and were
$265,000 and $257,000 at December 25, 2013 and
December 26, 2012, respectively. Pursuant to
Intermediate’s Franchise Disclosure Document,
company-operated restaurants contribute to the advertising fund on
the same basis as franchised restaurants. At December 25,
2013, the Company was obligated to spend an additional $119,000 in
future periods to comply with this requirement.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Production costs of commercials, programming and other marketing
activities are charged to the advertising funds when the
advertising is first used for its intended purpose, and the costs
of advertising are charged to operations as incurred. Total
contributions and other marketing expenses, are included in
selling, general, and administrative expenses in the accompanying
consolidated statements of operations.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Basis of Presentation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company uses a 52- or 53-week fiscal year ending on the last
Wednesday of the calendar year. In a 52-week fiscal year, each
quarter includes 13 weeks of operations; in a 53-week fiscal year,
the first, second and third quarters each include 13 weeks of
operations and the fourth quarter includes 14 weeks of operations.
Every six or seven years a 53-week fiscal year occurs. Fiscal 2013
and 2012, which were 52-week years, ended on December 25, 2013
and December 26, 2012, respectively.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>14. COMMITMENTS AND CONTINGENCIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Legal Matters</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On or about February 24, 2014, a former employee filed a class
action in the Superior Court of the State of California, County of
Orange, against EPL on behalf of all putative class members (all
hourly employees from 2010 to the present) alleging certain
violations of California labor laws, including failure to pay
overtime compensation, failure to provide meal periods and rest
breaks and failure to provide itemized wage statements. The
putative lead plaintiff’s requested remedies include
compensatory and punitive damages, injunctive relief, disgorgement
of profits and reasonable attorneys’ fees and costs. The
Company was served with the complaint on March 3, 2014. While
the Company intends to vigorously defend against this action,
including its class certification, the ultimate outcome of the case
is presently not determinable as it is in a preliminary phase.
Thus, the Company cannot at this time determine the likelihood of
an adverse judgment or a likely range of damages in the event of an
adverse judgment. Any settlement of or judgment with a negative
outcome arising from such lawsuit could have an adverse material
impact.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company is involved in various claims and legal actions that
arise in the ordinary course of business. The Company does not
believe that the ultimate resolution of these actions will have a
material adverse effect on the Company’s financial position,
results of operations, liquidity and capital resources. A
significant increase in the number of claims or an increase in
amounts owing under successful claims could materially adversely
affect the Company’s business, financial condition, results
of operations and cash flows.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Purchasing Commitments</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company has long-term beverage supply agreements with certain
major beverage vendors. Pursuant to the terms of these
arrangements, marketing rebates are provided to the Company and its
franchisees from the beverage vendors based upon the dollar volume
of purchases for system-wide restaurants which will vary according
to their demand for beverage syrup and fluctuations in the market
rates for beverage syrup. These contracts have terms extending into
2017 with an estimated Company obligation totaling $24.3
million.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
At December 25, 2013, the Company’s total estimated
commitment to purchase chicken was $2.4 million.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Contingent Lease Obligations</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
As a result of assigning the Company’s interest in
obligations under real estate leases in connection with the sale of
Company-operated restaurants to some of the Company’s
franchisees, the Company is contingently liable on two lease
agreements. These leases have various terms, the latest of which
expires in 2015. As of December 25, 2013, the potential amount
of undiscounted payments the Company could be required to make in
the event of non-payment by the primary lessee was $158,000. The
present value of these potential payments discounted at the
Company’s estimated pre-tax cost of debt at December 25,
2013 was $139,000. The Company’s franchisees are primarily
liable on the leases. The Company has cross-default provisions with
these franchisees that would put them in default of their franchise
agreement in the event of non-payment under the leases. The Company
believes these cross-default provisions reduce the risk that
payments will be required to be made under these leases.
Accordingly, no liability has been recorded in the Company’s
consolidated financial statements related to these guarantees.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Employment Agreements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company has employment agreements with four of the officers of
the Company on an at will basis. These agreements provide for
minimum salary levels, possible annual adjustments for
cost-of-living changes, and incentive bonuses that are payable
under certain business conditions.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Indemnification Agreements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company has entered into indemnification agreements with each
of the current directors and executive officers. These agreements
require the Company to indemnify these individuals to the fullest
extent permitted under Delaware law against liabilities that may
arise by reason of their service to the Company and to advance
expenses incurred as a result of any proceeding against them as to
which they could be indemnified. The Company also intends to enter
into indemnification agreements with our future directors and
executive officers.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>6. NEW CREDIT AGREEMENTS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On October 11, 2013 (the “Closing Date”) the
Company refinanced its debt, with EPL entering into (i) a new
first lien credit agreement (“First Lien Credit
Agreement”) that includes a $190 million Senior Secured Term
Loan (“First Lien Term Loan”) and a senior secured
revolving credit facility of $15 million (“Revolver”)
that, in each case, matures in October, 2018, and (ii) a new
second lien credit agreement (“Second Lien Credit
Agreement” and together with the First Lien Credit Agreement,
the “Credit Agreements”) that includes a $100 million
Second Lien Term Loan (“Second Lien Term Loan”) and
together with the First Lien Term Loan, (the “Term
Loans”) that matures in April 2019. The proceeds received
from the Term Loans on the Closing Date plus $14.4 million funded
by the Company were used to pay off the senior secured first lien
credit facility due July 2017 and 17% second priority senior
secured notes due January 2018 (collectively, the “Prior
Credit Agreements”) and to pay fees and expenses in
connection therewith.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Credit Agreements were executed with Intermediate as guarantor,
Jefferies Finance LLC, as administrative and collateral agents and
solely with respect to the First Lien Credit Agreement, General
Electric Capital Corporation as documentation agent, swingline
lender and issuing bank.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Credit Agreements contain a number of negative and financial
covenants, including, among others, the following (all subject to
certain exceptions): a maximum total leverage ratio covenant, a
minimum interest coverage ratio covenant, a maximum capital
expenditure covenant, and limitations on indebtedness, liens,
investments, asset sales, mergers, consolidations, liquidations and
dissolutions, restricted payments and negative pledges. The Credit
Agreement also contains certain customary affirmative covenants and
events of default. The Company was in compliance with all such
covenants at December 25, 2013.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>First Lien Credit Agreement</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Loans under the First Lien Credit Agreement bear interest, at an
Alternate Base Rate or LIBOR, at EPL’s option, plus an
applicable margin. The applicable margin rate under the First Lien
Credit Agreement is 4.25% with respect to LIBOR loans and 3.25%
with respect to Alternate Base Rate loans with a 1.00% floor with
respect to the LIBOR rate. Interest is due on loan amounts under
Alternate Base Rate elections on a monthly basis and on loan
amounts bearing interest based on LIBOR at the end of each interest
period in effect, provided, that with respect to LIBOR interest
periods that are longer than three months, interest is payable at
three month intervals. The First Lien Term Loan was issued at a
discount of $950,000, and this discount is being accreted over the
term of the loan, using the effective interest method. The
unamortized discount at December 25, 2013 is $910,000.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The First Lien Term Loan requires quarterly principal payments of
0.25% be made commencing March 26, 2014. Obligations under the
First Lien Credit Agreement are secured by a first priority lien on
substantially all of EPL’s and Intermediate’s
assets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Revolver provides for a $15 million revolving line of credit.
At December 25, 2013, $7.3 million of letters of credit are
outstanding and $7.7 million is available to borrow under the
revolving line of credit.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Second Lien Credit Agreement</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Loans under the Second Lien Credit Agreements bear interest, at an
Alternate Base Rate or LIBOR, at EPL’s option, plus an
applicable margin. The applicable margin rate under the Second Lien
Credit Agreement is 8.50% with respect to LIBOR loans and 7.50%
with respect to Alternate Base Rate loans with a 1.00% floor with
respect to the LIBOR rate. Interest is due on loan amounts under
Alternate Base Rate elections on a monthly basis and on loan
amounts bearing interest based on LIBOR at the end of each interest
period in effect, provided, that with respect to LIBOR interest
periods that are longer than three months, interest is payable at
three month intervals. The Second Lien Term Loan was issued at a
discount of $1.0 million, and this discount is being accreted over
the term of the loan, using the effective interest method. The
unamortized discount at December 25, 2013 is $962,000. The
Second Lien Term Loan and the related guarantees are secured by a
second-priority lien on substantially all of the assets and equity
interests of EPL and Intermediate, subject to certain exceptions,
which will also secure the First Lien Term Loan on a first-priority
basis.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Transaction costs</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Transaction costs of $8.1 million were incurred in connection with
the October 11, 2013 refinancing and were capitalized and are
included in other assets in the accompanying consolidated balance
sheets and the related amortization is reflected as a component of
interest expense, net in the accompanying consolidated financial
statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Maturities</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Annual principal maturities of the First Lien Term Loan and the
Second Lien Term Loan fall due as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ending</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>First Lien</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>Second Lien</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 31, 2014</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,900</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 30, 2015</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,900</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 28, 2016</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,900</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 27, 2017</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,900</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 26, 2018</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">182,400</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 25, 2019</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">100,000</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    190,000</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    100,000</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: unamortized discount</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(910</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(962</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">189,090</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">99,038</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Earnings per share</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Earnings per share (“EPS”) is calculated using the
weighted average number of common shares outstanding during each
period. Diluted EPS assumes the conversion, exercise or issuance of
all potential common stock equivalents unless the effect is to
reduce a loss or increase the income per share. For purposes of
this calculation, options are considered to be common stock
equivalents and are only included in the calculation of diluted
earnings per share when their effect is dilutive. The shares used
to compute basic and diluted net income per share represent the
weighted-average common shares outstanding.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>13. NET LOSS PER SHARE</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Basic net loss per share is calculated using the weighted average
shares of common stock outstanding during the years ended
December 25, 2013 and December 26, 2012. Diluted net loss
per share is calculated using the weighted average number of common
and potentially dilutive common shares outstanding during the
period, using the treasury stock method.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
For the year ended December 25, 2013, potentially dilutive
securities, which consist of options to purchase 1,709,748 shares
of common stock at prices ranging from $1.81 to $12.72 were not
included in the computation of diluted net loss per share because
such inclusion would be antidilutive.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
For the year ended December 26, 2012, potentially dilutive
securities, which consist of options to purchase 836,402 shares of
common stock at prices ranging from $1.81 to $12.72 were not
included in the computation of diluted net loss per share because
such inclusion would be antidilutive.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The following table sets forth the computation of basic and diluted
net loss per share for the periods indicated (in thousands, except
for per share data):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="73%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Numerator:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net Loss</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(16,873</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(7,865</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Denominator:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted average shares outstanding</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">28,712,622</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">28,712,194</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net Loss Per Share</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(0.59</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(0.27</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">)</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Goodwill and Indefinite Lived Intangible Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s indefinite lived intangible assets consist of
trademarks. Goodwill represents the excess of cost over fair value
of net identified assets acquired in business combinations
accounted for under the purchase method. Goodwill resulted from the
Acquisition and from the acquisition of certain franchise
locations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Upon the sale of a restaurant, goodwill is decremented. The amount
of goodwill written-off is determined based on the relative fair
value of the reporting unit disposed of as a percentage of the fair
value of the reporting unit retained.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company does not amortize its goodwill and indefinite lived
intangible assets. The Company performs its impairment test
annually at its fiscal year end, or more frequently if impairment
indicators arise. The Company reviews goodwill for impairment
utilizing either a qualitative assessment or a two-step process. If
the Company decides that it is appropriate to perform a qualitative
assessment and concludes that the fair value of a reporting unit
more likely than not exceeds its carrying value, no further
evaluation is necessary. If the Company performs the two-step
process, the first step of the goodwill impairment test is used to
identify potential impairment by comparing the fair value of a
reporting unit with its carrying amount, including goodwill. If the
fair value of a reporting unit exceeds its carrying amount,
goodwill of the reporting unit is considered not impaired and the
second step of the impairment test is unnecessary. If the carrying
amount of a reporting unit exceeds its fair value, the second step
of the goodwill impairment test is performed to measure the amount
of impairment loss, if any.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The second step of the goodwill impairment test compares the
implied fair value of the reporting unit’s goodwill with the
carrying amount of that goodwill. If the carrying amount of the
reporting unit’s goodwill exceeds the implied fair value of
that goodwill, an impairment loss is recognized in an amount equal
to that excess. The implied fair value of goodwill is determined in
the same manner as the amount of goodwill recognized in a business
combination. That is, the fair value of the reporting unit is
allocated to all of the assets and liabilities of that unit
(including any unrecognized intangible assets) as if the reporting
unit had been acquired in a business combination and the fair value
of the reporting unit was the purchase price paid to acquire the
reporting unit.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The assumptions used in the estimate of fair value are generally
consistent with the past performance of the Company’s
reporting unit and are also consistent with the projections and
assumptions that are used in current operating plans. These
assumptions are subject to change as a result of changing economic
and competitive conditions.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The impairment test for indefinite lived intangible assets consists
of either a qualitative assessment or a comparison of the fair
value of the intangible asset with its carrying amount. The excess
of the carrying amount of the intangible asset over its fair value
is its impairment loss.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
No impairment was recorded during the years ended December 25,
2013 or December 26, 2012.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Inventories</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Inventories consist principally of food, beverages and paper
supplies and are valued at the lower of average cost or market.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
The provision for income taxes differs from the amount computed by
applying the federal income tax rate as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Statutory regular federal income tax rate</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">35.0</td>
<td valign="bottom" nowrap="nowrap">% </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">35.0</td>
<td valign="bottom" nowrap="nowrap">% </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
State tax benefit (net of federal benefit)</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5.4</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">12.7</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Change in tax rate</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(15.5</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Change in valuation allowance</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(43.4</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(75.9</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(6.5</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5.2</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(9.5</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">)% </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(38.5</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">)% </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Preopening Costs</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Preopening costs incurred in connection with the opening of new
restaurants are expensed as incurred. Preopening costs, which are
included in general and administrative expenses on the accompanying
consolidated statements of operations, were $201,000 and $320,000
for the years ended December 25, 2013 and December 26,
2012, respectively.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Stock Based Compensation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Accounting literature requires the recognition of compensation
expense using a fair-value based method for costs related to all
share-based payments including stock options and stock issued under
the Company’s employee stock plans. The guidance also
requires companies to estimate the fair value of share-based
payment awards on the date of grant using an option-pricing model.
The cost is recognized on a straight-line basis over the period
during which an employee is required to provide service, usually
the vesting period. For options that are based on a performance
requirement, the cost is recognized on an accelerated basis over
the period in which the performance criteria relate.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
Information regarding the Company’s future lease obligations
at December 25, 2013 is as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="61%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
 <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Capital
Leases</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Operating
Leases</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom"><b>For
the Years Ending</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Minimum<br />
Lease<br />
Payments</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Minimum<br />
Sublease<br />
Income</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Minimum<br />
Lease<br />
Payments</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Minimum<br />
Sublease<br />
Income</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 31, 2014</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">416</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">115</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,645</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,004</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 30, 2015</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">320</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">72</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">17,203</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">704</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 28, 2016</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">258</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">72</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,982</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">595</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 27, 2017</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">199</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,431</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">511</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 26, 2018</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">172</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,851</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">354</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Thereafter</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">249</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">78,248</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">116</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,614</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">287</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">159,360</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">3,284</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: imputed interest (11.0% to 14.8%)</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(500</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Present value of capital lease obligations</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,114</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: current maturities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(267</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Noncurrent portion</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">847</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>4. GOODWILL AND OTHER INTANGIBLE ASSETS AND LIABILITIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Changes in goodwill consist of the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Balance at beginning of year</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">249,924</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">249,924</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Restaurant disposition</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(600</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Balance at end of year</p>
</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">$</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">249,324</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">$</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">249,924</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
The Company’s restaurant in Norwalk, California was closed
during fiscal 2013 due to an eminent domain purchase by the State
of California. The Company received proceeds of approximately
$1,348,000 from the State. Goodwill was decremented by $600,000,
based on a calculation of the fair value of the restaurant closed
as a percentage of the relative fair value of the remainder of the
reporting unit retained. The Company recognized a net gain of
$400,000, which is recorded as gain on disposition of restaurant in
the accompanying consolidated statements of operations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Domestic trademarks consist of the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Beginning balance</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">120,700</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">120,700</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Accumulated impairment charges</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(58,812</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(58,812</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Ending balance</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">61,888</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">61,888</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other intangible assets subject to amortization consist of the
following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Favorable leasehold interest</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,038</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,038</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated amortization</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(5,104</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(4,932</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total favorable leasehold interest, net</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">934</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,106</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Unfavorable leasehold interest</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(9,156</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(9,156</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated amortization</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">7,229</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">6,844</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Unfavorable leasehold interest liability, net</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(1,927</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(2,312</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The estimated net amortization credits (net liability) for the
Company’s favorable and unfavorable leasehold interests for
each of the five succeeding fiscal years and thereafter is as
follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="74%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ending</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Favorable<br />
Leasehold<br />
Interest</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Unfavorable<br />
Leasehold<br />
Interest</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 31, 2014</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">156</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(383</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 30, 2015</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">140</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(296</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 28, 2016</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">130</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(228</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 27, 2017</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">106</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(225</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 26, 2018</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">97</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(144</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Thereafter</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">305</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(651</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">934</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(1,927</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The remaining weighted average amortization periods of the
favorable leasehold interest and the unfavorable leasehold
liability are 4 years and 9 years, respectfully.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Income Taxes</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The provision for income taxes, income taxes payable and deferred
income taxes are determined using the asset and liability method.
Deferred tax assets and liabilities are determined based on
temporary differences between the financial carrying amounts and
the tax basis of assets and liabilities using enacted tax rates in
effect in the years in which the temporary differences are expected
to reverse. On a periodic basis, the Company assesses the
probability that its net deferred tax assets, if any, will be
recovered. If after evaluating all of the positive and negative
evidence, a conclusion is made that it is more likely than not that
some portion or all of the net deferred tax assets will not be
recovered, a valuation allowance is provided by a charge to tax
expense to reserve the portion of the deferred tax assets which are
not expected to be realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company reviews its filing positions for all open tax years in
all U.S. federal and state jurisdictions where the Company is
required to file.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
When there are uncertainties related to potential income tax
benefits, in order to qualify for recognition, the position the
Company takes has to have at least a “more likely than
not” chance of being sustained (based on the position’s
technical merits) upon challenge by the respective authorities. The
term “more likely than not” means a likelihood of more
than 50 percent. Otherwise, the Company may not recognize any of
the potential tax benefit associated with the position. The Company
recognizes a benefit for a tax position that meets the “more
likely than not” criterion at the largest amount of tax
benefit that is greater than 50 percent likely of being realized
upon its effective resolution. Unrecognized tax benefits involve
management’s judgment regarding the likelihood of the benefit
being sustained. The final resolution of uncertain tax positions
could result in adjustments to recorded amounts and may affect our
results of operations, financial position and cash flows.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s policy is to recognize interest and/or
penalties related to income tax matters in income tax expense. The
Company had no accrual for interest or penalties at
December 25, 2013 and December 26, 2012, respectively,
and has not recognized interest and/or penalties during the years
ended December 25, 2013 and December 26, 2012,
respectively, since there are no material unrecognized tax
benefits. Management believes no material change to the amount of
unrecognized tax benefits will occur within in the next 12
months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The tax years subject to examination by major tax jurisdictions
include the years 2010 and forward by the U.S. Internal Revenue
Service, and the years 2009 and forward for various states.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Changes in goodwill consist of the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Balance at beginning of year</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">249,924</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">249,924</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Restaurant disposition</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(600</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Balance at end of year</p>
</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">$</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">249,324</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">$</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">249,924</td>
<td style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Changes in stock options for the years ended December 25, 2013
and December 26, 2012 are as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Shares</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Weighted-<br />
Average<br />
Exercise Price</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Outstanding—December 28, 2011</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">576,370</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9.74</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Grants</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,190,019</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4.77</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Exercised</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(8,093</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1.18</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Forfeited, cancelled or expired</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(285,757</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">9.23</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Outstanding—December 26, 2012</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,472,539</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5.23</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Grants</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">802,857</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5.25</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Exercised</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Forfeited, cancelled or expired</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(937,300</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4.98</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Outstanding—December 25, 2013</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">3,338,096</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">5.31</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Vested and expected to vest at December 25, 2013</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">3,338,096</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">    5.31</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Exercisable at December 25, 2013</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,709,748</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">5.36</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Restricted Cash</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s restricted cash represents cash collateral to
one commercial bank for Company credit cards.</p>
</div>
0.25
-0.095
P1Y9M18D
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>1. DESCRIPTION OF BUSINESS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
El Pollo Loco Holdings, Inc. (“Holdings”) is a Delaware
corporation headquartered in Costa Mesa, California. Holdings and
its direct and indirect subsidiaries are collectively known as the
“Company.” The Company’s activities are conducted
principally through its indirect subsidiary, El Pollo Loco, Inc.
(“EPL”), which develops, franchises, licenses and
operates quick-service restaurants under the name El Pollo
Loco<sup style="FONT-SIZE: 85%; VERTICAL-ALIGN: top">®</sup>
and operates under one business segment. The restaurants, which are
located principally in California but also in Arizona, Nevada,
Texas, and Utah, specialize in flame-grilled chicken in a wide
variety of contemporary Mexican-influenced entrees, including
specialty chicken burritos, chicken quesadillas, chicken tortilla
soup, Pollo Bowls and Pollo Salads. At December 25, 2013, the
Company operated 168 (133 in the greater Los Angeles area) and
franchised 233 (136 in the greater Los Angeles area) El Pollo Loco
restaurants. In addition, the Company currently licenses two
restaurants in the Philippines that are set to expire in 2016. The
Company is a subsidiary of Trimaran Pollo Partners, LLC (the
“LLC,” which is controlled by affiliates of Trimaran
Capital, LLC). LLC acquired Chicken Acquisition Corp.
(“CAC”), a predecessor of Holdings, on
November 17, 2005 (the “Acquisition”) and has a
99.5% ownership interest. The LLC’s only material asset is
its investment in Holdings.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On April 22, 2014, CAC, its wholly owned subsidiary, Chicken
Subsidiary Corp (“CSC”) and CSC’s wholly owned
subsidiary, the former El Pollo Loco Holdings, Inc. (“Old
Holdings”) entered into the following reorganization
transactions: (i) Old Holdings merged with and into CSC with
CSC continuing as the surviving corporation; (ii) CSC merged
with and into CAC with CAC continuing as the surviving corporation
and (iii) CAC renamed itself El Pollo Loco Holdings, Inc.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Holdings has no material assets or operations. Holdings’
direct subsidiary, EPL Intermediate, Inc.
(“Intermediate”) guarantees EPL’s credit
agreements (see Note 6) on a full and unconditional basis and
Intermediate has no subsidiaries other than EPL. EPL is a separate
and distinct legal entity, has no obligation to make funds
available to Intermediate, and currently has restrictions that
limit distributions or dividends to be paid by EPL to Intermediate,
which ultimately limit distributions or dividends to Holdings.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
EPL may make distributions to Intermediate only under certain
restricted circumstances, including, but not limited to, payments
of: (i) franchise taxes or other costs of maintaining the
corporate existence of Intermediate, (ii) accounting, legal,
administrative and operating expenses of Intermediate, up to
$250,000 in any 12 month period, and (iii) EPL’s
allocable portion of tax liabilities on consolidated tax returns
with Intermediate, subject to certain overall amounts.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
EPL is also restricted in its dividend payments to Intermediate.
These restricted dividend payments include, but are not limited to:
(i) dividends payable solely in EPL’s own common stock
or other common equity interests, (ii) payments that permit
Intermediate to repurchase or redeem qualified capital stock of
Intermediate held by present or former officers, directors or
employees, not to exceed $1,000,000 in any fiscal year (with unused
amounts carried over to the next fiscal year), and
(iii) provided that no default or event of default under the
credit facilities has occurred, is continuing, or would result
therefrom, dividends limited to various absolute ceiling amounts,
including an aggregate amount up to $5,000,000 (shared with
Intermediate) for dividends not including those paid pursuant to
stock options and other benefit plans.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Likewise, Intermediate is restricted in its own dividend payments,
with such restrictions including, but not limited to, dividends
payable solely in Intermediate’s own common stock or other
common equity interests. Intermediate may purchase, redeem or
otherwise acquire equity interests issued by it with the proceeds
received by it from the substantially concurrent issue of new
shares of its common stock or other common equity interests.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company operates in only one segment. All significant revenues
relate to retail sales of food and beverages to the general public
through either company or franchised restaurants.</p>
</div>
19700000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other noncurrent liabilities consist of the following (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    6,648</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    7,546</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,396</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">1,662</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total noncurrent liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">8,044</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">9,208</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>15. RELATED PARTY TRANSACTIONS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Trimaran Capital LLC (“Trimaran”) and Freeman
Spogli & Co. (“Freeman Spogli”) indirectly
beneficially own shares sufficient for majority control over all
matters requiring stockholder votes, including: the election of
directors; mergers, consolidations and acquisitions; the sale of
all or substantially all of the Company’s assets and other
decisions affecting the Company’s capital structure;
amendments to the Company’s certificate of incorporation or
bylaws; and the Company’s winding up and dissolution.
Furthermore, pursuant to the limited liability company operating
agreement of LLC, investment funds managed by Trimaran and Freeman
Spogli will have the right to instruct LLC to appoint certain
members of the board of directors and board committees of the
Company, subject to certain conditions. Specifically, provided LLC
owns a majority of the Company’s common stock, Freeman Spogli
will be able to appoint one member of the board of directors for so
long as they hold 5% of the outstanding membership interests of LLC
and Trimaran will be able to appoint the remaining members of the
board of directors.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On November 18, 2005, the Company entered into a Monitoring
and Management Services Agreement (the “Agreement”)
with Trimaran Fund Management, LLC (“Fund Management”),
an affiliate of the majority owner of the Company and of certain
directors, which provides for annual fees of $500,000 and
reasonable expenses. This Agreement was amended on
December 26, 2007 to add an affiliate of FS Equity Partners V,
L.P., FS Affiliates V, L.P. (minority shareholders of the Company)
as a party to the Agreement. Such party shares in the fees payable
under the Agreement. During the years ended December 25, 2013
and December 26, 2012, $624,000 and $612,000, respectively,
were paid pursuant to this Agreement. These amounts are included in
general and administrative expenses in the accompanying
consolidated statements of operations.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The estimated net amortization credits (net liability) for the
Company’s favorable and unfavorable leasehold interests for
each of the five succeeding fiscal years and thereafter is as
follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="74%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ending</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Favorable<br />
Leasehold<br />
Interest</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Unfavorable<br />
Leasehold<br />
Interest</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 31, 2014</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">156</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(383</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 30, 2015</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">140</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(296</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 28, 2016</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">130</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(228</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 27, 2017</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">106</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(225</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 26, 2018</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">97</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(144</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Thereafter</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">305</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(651</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">934</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(1,927</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Operating Leases</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Rent expense for the Company’s operating leases, which
generally have escalating rentals over the term of the lease, is
recorded on a straight-line basis over the expected lease term. The
lease term begins when the Company has the right to control the use
of the leased property, which is typically before rent payments are
due under the terms of the lease. Rent expense is included in
occupancy and other operating expenses on the consolidated
statements of operations. The difference between rent expense and
rent paid is recorded as deferred rent, which is included in other
noncurrent liabilities in the accompanying consolidated balance
sheets. Percentage rent expenses are recorded based on estimated
sales or gross margin for respective restaurants over the
contingency period.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Any leasehold improvements that are funded by lessor incentives
under operating leases are recorded as leasehold improvements and
amortized over the expected lease term. Such incentives are also
recorded as deferred rent and amortized as reductions to rent
expense over the expected lease term.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Restaurant and Franchise Revenue</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Revenues from the operation of company-operated restaurants are
recognized as food and beverage products are delivered to customers
and payment is tendered at the time of sale. The Company presents
sales net of sales-related taxes and promotional allowances.
Promotional allowances amounted to approximately $5.7 million and
$4.0 million during the years ended December 25, 2013 and
December 26, 2012, respectively. Franchise revenue consists of
franchise royalties, initial franchise fees, license fees due from
franchisees, IT support services and rental income for leases and
subleases to franchisees. Franchise royalties are based upon a
percentage of net sales of the franchisee and are recorded as
income as such sales are earned by the franchisees. Initial
franchise and license fees are recognized when all material
obligations have been performed and conditions have been satisfied,
typically when operations of the franchised restaurant have
commenced. Initial franchise fees recognized during the years ended
December 25, 2013 and December 26, 2012, totaled $521,000
and $186,000, respectively. The Company recognizes renewal fees
when a renewal agreement with a franchisee becomes effective.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Net rent expense is as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Base rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,732</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,331</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Contingent rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">491</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">418</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: sublease income</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(3,602</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(3,489</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net rent expense</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">15,621</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">15,260</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Stock options at December 25, 2013 are summarized as
follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2"><b>Range of<br />
Exercise<br />
Prices</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Number<br />
Outstanding</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Weighted-<br />
Average<br />
Remaining<br />
Contractual<br />
Life (in Years)</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Weighted-<br />
Average<br />
Exercise<br />
Price</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Number<br />
Exercisable</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Weighted-<br />
Average<br />
Exercise<br />
Price</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 9.5pt">1.81 – $  4.09</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,057,279</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8.43</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">    2.98</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">533,551</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">    2.69</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 9.5pt">5.84 –   10.09</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,157,703</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8.32</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6.02</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,110,247</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6.20</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 9.5pt">12.71 –   12.72</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">123,113</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">3.02</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">12.71</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">65,950</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">12.71</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 9.5pt">1.81 – $12.72</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">3,338,096</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">8.16</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">5.31</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,709,748</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">5.36</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
P10Y
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>8. OTHER ACCRUED EXPENSES AND CURRENT LIABILITIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other accrued expenses and current liabilities consist of the
following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Accrued sales and property taxes</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    3,190</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    3,010</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,635</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">4,230</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total other accrued expenses and current liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">7,825</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">7,240</font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>9. OTHER NONCURRENT LIABILITIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other noncurrent liabilities consist of the following (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    6,648</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    7,546</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,396</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">1,662</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total noncurrent liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">8,044</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">9,208</font></td>
</tr>
</table>
</div>
0.054
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The provision for income taxes is based on the following components
(in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Current income taxes:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Federal</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
State</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">30</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">26</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total current</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">30</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">28</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred income taxes:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Federal</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    1,037</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    1,013</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
State</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">334</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">986</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total deferred</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,371</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,999</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 9.5pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 9.5pt">1,401</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">2,027</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other intangible assets subject to amortization consist of the
following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Favorable leasehold interest</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,038</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,038</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated amortization</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(5,104</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(4,932</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total favorable leasehold interest, net</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">934</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,106</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Unfavorable leasehold interest</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(9,156</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(9,156</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated amortization</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">7,229</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">6,844</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Unfavorable leasehold interest liability, net</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(1,927</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(2,312</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Domestic trademarks consist of the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Beginning balance</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">120,700</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">120,700</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Accumulated impairment charges</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(58,812</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(58,812</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Ending balance</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">61,888</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">61,888</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
802857
1709748
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Use of Estimates</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The preparation of consolidated financial statements in conformity
with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the
consolidated financial statements and revenue and expenses during
the period reported. Actual results could materially differ from
those estimates. The Company’s significant estimates include
estimates for impairment of goodwill, intangible assets and plant
and equipment, insurance reserves, lease termination liabilities,
stock-based compensation, and income tax valuation allowances.</p>
</div>
28712622
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Cash and Cash Equivalents</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company considers all highly liquid instruments with a maturity
of three months or less at the date of purchase to be cash
equivalents.</p>
</div>
-0.434
-0.065
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Intangible assets and liabilities with a definite life are
amortized using the straight-line method over their estimated
useful lives as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="51%"></td>
<td valign="bottom" width="3%"></td>
<td width="46%"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Favorable leasehold interests</p>
</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" align="right">
1 to 18 years (remaining lease term)</td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Unfavorable leasehold interests</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">
1 to 20 years (remaining lease term)</td>
</tr>
</table>
</div>
EPL may make distributions to Intermediate only under certain restricted circumstances, including, but not limited to, payments of (i) franchise taxes or other costs of maintaining the corporate existence of Intermediate, (ii) accounting, legal, administrative and operating expenses of Intermediate, up to $250,000 in any 12 month period, and (iii) EPL's allocable portion of tax liabilities on consolidated tax returns with Intermediate, subject to certain overall amounts.
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Other Intangibles, Net—definite lived</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Definite lived intangible assets consist of the value allocated to
the Company’s favorable and unfavorable leasehold interests
that resulted from the Acquisition.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Favorable leasehold interest represents the asset in excess of the
approximate fair market value of the leases assumed as of
November 17, 2005, the date of the Acquisition. The amount is
being reduced over the approximate average life of the leases. This
amount is shown as other intangible assets-net on the accompanying
consolidated balance sheets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Unfavorable leasehold interest liability represents the liability
in excess of the approximate fair market value of the leases
assumed as of November 17, 2005, the date of the Acquisition.
The amount is being reduced over the approximate average life of
the leases. This amount is shown as other intangible
liabilities-net on the accompanying consolidated balance
sheets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Intangible assets and liabilities with a definite life are
amortized using the straight-line method over their estimated
useful lives as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="51%"></td>
<td valign="bottom" width="3%"></td>
<td width="46%"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Favorable leasehold interests</p>
</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" align="right">
1 to 18 years (remaining lease term)</td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Unfavorable leasehold interests</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">
1 to 20 years (remaining lease term)</td>
</tr>
</table>
</div>
1
expire beginning in 2024 and 2014, respectively.
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Property and Equipment Owned, Net</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Property and equipment is stated at cost and is depreciated using
the straight-line method over the estimated useful lives of the
assets. Leasehold improvements and property held under capital
leases are amortized over the shorter of their estimated useful
lives or the remaining lease terms. For leases with renewal periods
at the Company’s option, the Company generally uses the
original lease term, excluding the option periods, to determine
estimated useful lives; if failure to exercise a renewal option
imposes an economic penalty on the Company, such that management
determines at the inception of the lease that renewal is reasonably
assured, the Company may include the renewal option period in the
determination of appropriate estimated useful lives.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The estimated useful service lives are as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="66%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings</p>
</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" align="right">20 years</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 30 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Building improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Restaurant equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Leasehold improvements</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">
Shorter of useful life or lease term</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company capitalizes certain costs in conjunction with site
selection that relate to specific sites for planned future
restaurants. The Company also capitalizes certain costs, including
interest, in conjunction with constructing new restaurants. These
costs are included in property and amortized over the shorter of
the life of the related buildings and leasehold improvements or the
lease term. Costs related to abandoned sites and other site
selection costs that cannot be identified with specific restaurants
are charged to general and administrative expenses in the
accompanying consolidated statements of operations. The Company did
not capitalize any internal costs or interest costs related to site
selection and construction activities during the years ended
December 25, 2013 or December 26, 2012.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Minimum future rental income for company-operated properties under
noncancelable operating leases, which is recorded on a
straight-line basis, in effect as of December 25, 2013 is as
follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="93%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ending</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 31, 2014</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">244</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 30, 2015</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">215</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 28, 2016</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">101</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 27, 2017</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">84</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 26, 2018</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">84</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total future minimum rental income</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">728</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
4.98
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>16. STOCK SPLIT AND AUTHORIZATION OF ADDITIONAL SHARES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On July 14, 2014, the Company amended its certificate of
incorporation to increase the number of shares the Company is
authorized to issue to 200,000,000 shares of common stock, par
value $0.01 per share. The amendment of the certificate of
incorporation effected an internal recapitalization pursuant to
which the Company effected an 8.56381-for-1 stock split on its
outstanding common stock.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Accordingly, all common share and per share amounts in these
consolidated financial statements and the notes thereto have been
adjusted to reflect the 8.56381-for-1 stock split as though it had
occurred at the beginning of the initial period presented.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Principles of Consolidation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The accompanying consolidated financial statements include the
accounts of Holdings and its wholly owned subsidiaries. All
significant intercompany balances and transactions have been
eliminated in consolidation.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Deferred Financing Fees</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Deferred financing fees are capitalized and amortized over the
period of the loan on an effective interest rate basis, which
approximates the effective interest method. Included in other
assets are fees (net of accumulated amortization) of $7.8 million
and $10.0 million as of December 25, 2013 and
December 26, 2012, respectively. Amortization expense for
deferred financing costs was $2.0 million and $2.1 million for the
years ended December 25, 2013 and December 26, 2012,
respectively, and is reflected as a component of interest expense
in the accompanying consolidated statements of operations. In
conjunction with the October 11, 2013 refinancing of the
Company’s debt, $8.4 million of unamortized deferred finance
costs related to the prior debt were written off (see Notes 6 and
7).</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>10. INCOME TAXES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The provision for income taxes is based on the following components
(in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Current income taxes:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Federal</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
State</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">30</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">26</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total current</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">30</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">28</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred income taxes:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Federal</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    1,037</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    1,013</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
State</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">334</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">986</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total deferred</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,371</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,999</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 9.5pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 9.5pt">1,401</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">2,027</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
The provision for income taxes differs from the amount computed by
applying the federal income tax rate as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Statutory regular federal income tax rate</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">35.0</td>
<td valign="bottom" nowrap="nowrap">% </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">35.0</td>
<td valign="bottom" nowrap="nowrap">% </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
State tax benefit (net of federal benefit)</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5.4</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">12.7</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Change in tax rate</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(15.5</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Change in valuation allowance</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(43.4</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(75.9</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(6.5</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5.2</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(9.5</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">)% </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(38.5</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">)% </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Deferred tax assets and liabilities are recorded for differences
between the financial statement and tax basis of the assets and
liabilities that will result in taxable or deductible amounts in
the future based on enacted 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.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s deferred tax assets and liabilities consist of
the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred assets:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Capital leases</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">413</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">560</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Accrued vacation</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">621</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">658</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Accrued legal</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">234</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Deferred rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,898</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,476</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Accrued workers’ compensation</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,045</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">934</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Enterprise zone and other credits</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">530</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">530</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Net operating losses</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    54,960</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">47,160</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Fixed assets</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,605</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,847</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Deferred financing costs</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">19</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">431</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5,859</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,701</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">70,184</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    63,297</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Valuation allowance</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(65,110</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(58,779</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net deferred tax assets</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5,074</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">4,518</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred liabilities:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Goodwill</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(7,357</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(5,723</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Trademark</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(26,315</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(25,646</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Prepaid expense</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(570</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(1,410</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(2,777</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(2,313</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred tax liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(37,019</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(35,092</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net deferred tax liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(31,945</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(30,574</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
The deferred tax amounts mentioned above have been classified on
the accompanying consolidated balance sheets as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Current:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Liabilities</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(322</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(334</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Noncurrent:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(31,623</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(30,240</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(31,945</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(30,574</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company has evaluated the available evidence supporting the
realization of its gross deferred tax assets, including the amount
and timing of future taxable income, and has determined it is more
likely than not that the assets will not be realized. Due to
uncertainties surrounding the realizability of the deferred tax
assets, the Company continues to maintain a full valuation
allowance against its deferred tax assets and the valuation
allowance increased by $6.3 million to $65.1 million at
December 25, 2013 from $58.8 million at December 26,
2012.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
As of December 25, 2013, the Company has federal and state net
operating loss carryforwards of $123 million and $136 million,
respectively, which expire beginning in 2024 and 2014,
respectively. The Company also has state enterprise zone credits
and alternative minimum tax credits of $351,000 and $157,000,
respectively, which carryforward indefinitely.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The utilization of net operating loss carryforwards may be subject
to limitations under provision of the Internal Revenue Code
Section 382 and similar state provisions. The net operating
loss carryforward includes losses of $0.3 million which are
attributable to excess stock option deductions. The benefits
related to these net operating losses will be recorded in
additional paid-in capital when realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Recently enacted tax laws may also affect the tax provision on the
Company’s consolidated financial statements. The state of
California passed a new law which mandates the use of a single
sales factor apportionment formula for tax years beginning on or
after January 1, 2013. As a result, the state deferred tax
assets were revalued during the year ended December 25, 2013
in order to account for the change in the tax law. As of
December 25, 2013, there was a 100% valuation allowance
against the state deferred tax asset.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company did not have any unrecognized tax benefits during the
years ended December 25, 2013 or December 26, 2012.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s deferred tax assets and liabilities consist of
the following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred assets:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Capital leases</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">413</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">560</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Accrued vacation</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">621</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">658</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Accrued legal</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">234</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Deferred rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,898</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,476</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Accrued workers’ compensation</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,045</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">934</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Enterprise zone and other credits</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">530</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">530</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Net operating losses</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    54,960</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">47,160</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Fixed assets</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,605</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,847</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Deferred financing costs</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">19</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">431</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5,859</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,701</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">70,184</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    63,297</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Valuation allowance</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(65,110</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(58,779</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net deferred tax assets</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5,074</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">4,518</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred liabilities:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Goodwill</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(7,357</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(5,723</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Trademark</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(26,315</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(25,646</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Prepaid expense</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(570</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(1,410</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(2,777</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(2,313</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Deferred tax liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(37,019</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(35,092</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net deferred tax liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(31,945</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(30,574</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The following table sets forth the computation of basic and diluted
net loss per share for the periods indicated (in thousands, except
for per share data):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="73%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Numerator:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net Loss</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(16,873</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(7,865</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Denominator:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Weighted average shares outstanding</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">28,712,622</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">28,712,194</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net Loss Per Share</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(0.59</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(0.27</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Gift cards</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company sells gift cards to its customers in the restaurants
and through selected third parties. The gift cards sold to
customers have no stated expiration dates and are subject to actual
and/or potential escheatment rights in several of the jurisdictions
in which the Company operates. The Company recognizes income from
gift cards when redeemed by the customer.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Annual principal maturities of the First Lien Term Loan and the
Second Lien Term Loan fall due as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ending</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>First Lien</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>Second Lien</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 31, 2014</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,900</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 30, 2015</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,900</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 28, 2016</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,900</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 27, 2017</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,900</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 26, 2018</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">182,400</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 25, 2019</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">100,000</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    190,000</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
    100,000</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: unamortized discount</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(910</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(962</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">189,090</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">99,038</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
937300
5.25
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Liquidity</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s principal liquidity requirements are to service
its debt and meet capital expenditure needs. At December 25,
2013, the Company’s total debt (including capital lease
liabilities) was $289.2 million. The Company’s ability to
make payments on its indebtedness and to fund planned capital
expenditures will depend on available cash and its ability to
generate adequate cash flows in the future, which, to a certain
extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond the
Company’s control. Based on current operations, the Company
believes that its cash flows from operations, available cash of
$17.0 million at December 25, 2013 and available
borrowings under the credit facility (which availability was $7.7
million at December 25, 2013) will be adequate to meet the
Company’s liquidity needs for the next 12 months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Basis of Presentation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company uses a 52- or 53-week fiscal year ending on the last
Wednesday of the calendar year. In a 52-week fiscal year, each
quarter includes 13 weeks of operations; in a 53-week fiscal year,
the first, second and third quarters each include 13 weeks of
operations and the fourth quarter includes 14 weeks of operations.
Every six or seven years a 53-week fiscal year occurs. Fiscal 2013
and 2012, which were 52-week years, ended on December 25, 2013
and December 26, 2012, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Principles of Consolidation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The accompanying consolidated financial statements include the
accounts of Holdings and its wholly owned subsidiaries. All
significant intercompany balances and transactions have been
eliminated in consolidation.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Use of Estimates</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The preparation of consolidated financial statements in conformity
with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the
consolidated financial statements and revenue and expenses during
the period reported. Actual results could materially differ from
those estimates. The Company’s significant estimates include
estimates for impairment of goodwill, intangible assets and plant
and equipment, insurance reserves, lease termination liabilities,
stock-based compensation, and income tax valuation allowances.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Cash and Cash Equivalents</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company considers all highly liquid instruments with a maturity
of three months or less at the date of purchase to be cash
equivalents.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Restricted Cash</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s restricted cash represents cash collateral to
one commercial bank for Company credit cards.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Concentration of Risk</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Cash and cash equivalents are maintained at financial institutions
and, at times, balances may exceed federally insured limits. The
Company has never experienced any losses related to these
balances.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company had two suppliers for which amounts due at
December 25, 2013 and December 26, 2012 totaled 45% and
51% and 11% and 13%, respectively, of the Company’s accounts
payable. Purchases from the same suppliers for the years ended
December 25, 2013 and December 26, 2012 totaled 31% and
13% and 24% and 15%, respectively, of the Company’s
purchases. Company-operated and franchised restaurants in the
greater Los Angeles area generated, in the aggregate, approximately
80% and 81% of revenue for the years ended December 25, 2013
and December 26, 2012, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Accounts and Other Receivables, Net</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Accounts and other receivables consist primarily of royalties,
advertising and sublease rent and related amounts receivable from
franchisees which are due on a monthly basis that may differ from
the Company’s month-end dates as well as credit/debit card
receivables. The need for an allowance for doubtful accounts is
reviewed on a specific identification basis based upon past due
balances and the financial strength of the obligor. Bad debt
expense was immaterial for the years ended December 25, 2013 and
December 26, 2012.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Inventories</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Inventories consist principally of food, beverages and paper
supplies and are valued at the lower of average cost or market.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Property and Equipment Owned, Net</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Property and equipment is stated at cost and is depreciated using
the straight-line method over the estimated useful lives of the
assets. Leasehold improvements and property held under capital
leases are amortized over the shorter of their estimated useful
lives or the remaining lease terms. For leases with renewal periods
at the Company’s option, the Company generally uses the
original lease term, excluding the option periods, to determine
estimated useful lives; if failure to exercise a renewal option
imposes an economic penalty on the Company, such that management
determines at the inception of the lease that renewal is reasonably
assured, the Company may include the renewal option period in the
determination of appropriate estimated useful lives.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The estimated useful service lives are as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="66%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings</p>
</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" align="right">20 years</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 30 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Building improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Restaurant equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Leasehold improvements</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">
Shorter of useful life or lease term</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company capitalizes certain costs in conjunction with site
selection that relate to specific sites for planned future
restaurants. The Company also capitalizes certain costs, including
interest, in conjunction with constructing new restaurants. These
costs are included in property and amortized over the shorter of
the life of the related buildings and leasehold improvements or the
lease term. Costs related to abandoned sites and other site
selection costs that cannot be identified with specific restaurants
are charged to general and administrative expenses in the
accompanying consolidated statements of operations. The Company did
not capitalize any internal costs or interest costs related to site
selection and construction activities during the years ended
December 25, 2013 or December 26, 2012.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Goodwill and Indefinite Lived Intangible Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s indefinite lived intangible assets consist of
trademarks. Goodwill represents the excess of cost over fair value
of net identified assets acquired in business combinations
accounted for under the purchase method. Goodwill resulted from the
Acquisition and from the acquisition of certain franchise
locations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Upon the sale of a restaurant, goodwill is decremented. The amount
of goodwill written-off is determined based on the relative fair
value of the reporting unit disposed of as a percentage of the fair
value of the reporting unit retained.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company does not amortize its goodwill and indefinite lived
intangible assets. The Company performs its impairment test
annually at its fiscal year end, or more frequently if impairment
indicators arise. The Company reviews goodwill for impairment
utilizing either a qualitative assessment or a two-step process. If
the Company decides that it is appropriate to perform a qualitative
assessment and concludes that the fair value of a reporting unit
more likely than not exceeds its carrying value, no further
evaluation is necessary. If the Company performs the two-step
process, the first step of the goodwill impairment test is used to
identify potential impairment by comparing the fair value of a
reporting unit with its carrying amount, including goodwill. If the
fair value of a reporting unit exceeds its carrying amount,
goodwill of the reporting unit is considered not impaired and the
second step of the impairment test is unnecessary. If the carrying
amount of a reporting unit exceeds its fair value, the second step
of the goodwill impairment test is performed to measure the amount
of impairment loss, if any.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The second step of the goodwill impairment test compares the
implied fair value of the reporting unit’s goodwill with the
carrying amount of that goodwill. If the carrying amount of the
reporting unit’s goodwill exceeds the implied fair value of
that goodwill, an impairment loss is recognized in an amount equal
to that excess. The implied fair value of goodwill is determined in
the same manner as the amount of goodwill recognized in a business
combination. That is, the fair value of the reporting unit is
allocated to all of the assets and liabilities of that unit
(including any unrecognized intangible assets) as if the reporting
unit had been acquired in a business combination and the fair value
of the reporting unit was the purchase price paid to acquire the
reporting unit.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The assumptions used in the estimate of fair value are generally
consistent with the past performance of the Company’s
reporting unit and are also consistent with the projections and
assumptions that are used in current operating plans. These
assumptions are subject to change as a result of changing economic
and competitive conditions.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The impairment test for indefinite lived intangible assets consists
of either a qualitative assessment or a comparison of the fair
value of the intangible asset with its carrying amount. The excess
of the carrying amount of the intangible asset over its fair value
is its impairment loss.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
No impairment was recorded during the years ended December 25,
2013 or December 26, 2012.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Other Intangibles, Net—definite lived</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Definite lived intangible assets consist of the value allocated to
the Company’s favorable and unfavorable leasehold interests
that resulted from the Acquisition.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Favorable leasehold interest represents the asset in excess of the
approximate fair market value of the leases assumed as of
November 17, 2005, the date of the Acquisition. The amount is
being reduced over the approximate average life of the leases. This
amount is shown as other intangible assets-net on the accompanying
consolidated balance sheets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Unfavorable leasehold interest liability represents the liability
in excess of the approximate fair market value of the leases
assumed as of November 17, 2005, the date of the Acquisition.
The amount is being reduced over the approximate average life of
the leases. This amount is shown as other intangible
liabilities-net on the accompanying consolidated balance
sheets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Intangible assets and liabilities with a definite life are
amortized using the straight-line method over their estimated
useful lives as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="51%"></td>
<td valign="bottom" width="3%"></td>
<td width="46%"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Favorable leasehold interests</p>
</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" align="right">
1 to 18 years (remaining lease term)</td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Unfavorable leasehold interests</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">
1 to 20 years (remaining lease term)</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Deferred Financing Fees</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Deferred financing fees are capitalized and amortized over the
period of the loan on an effective interest rate basis, which
approximates the effective interest method. Included in other
assets are fees (net of accumulated amortization) of $7.8 million
and $10.0 million as of December 25, 2013 and
December 26, 2012, respectively. Amortization expense for
deferred financing costs was $2.0 million and $2.1 million for the
years ended December 25, 2013 and December 26, 2012,
respectively, and is reflected as a component of interest expense
in the accompanying consolidated statements of operations. In
conjunction with the October 11, 2013 refinancing of the
Company’s debt, $8.4 million of unamortized deferred finance
costs related to the prior debt were written off (see Notes 6 and
7).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Impairment of Long-Lived Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company reviews its long-lived assets for impairment on a
restaurant-by-restaurant basis whenever events or changes in
circumstances indicate that the carrying value of certain assets
may not be recoverable. If the Company concludes that the carrying
value of certain assets will not be recovered based on expected
undiscounted future cash flows, an impairment write-down is
recorded to reduce the assets to their estimated fair value. The
Company recorded non-cash impairment charges of $27,000 and $42,000
for the years ended December 25, 2013 and December 26,
2012, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Insurance Reserves</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company is responsible for workers’ compensation, general
and health insurance claims up to a specified aggregate stop loss
amount. The Company maintains a reserve for estimated claims both
reported and incurred but not reported, based on historical claims
experience and other assumptions. At December 25, 2013 and
December 26, 2012, the Company had accrued $3,597,000 and
$3,153,000, respectively, and such amounts are reflected as accrued
insurance in the accompanying consolidated balance sheets. The
expense for such reserves for the years ended December 25,
2013 and December 26, 2012 totaled $6,912,000 and $8,361,000,
respectively. These amounts are included in payroll and benefits
and general and administrative expenses on the accompanying
consolidated statements of operations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Restaurant and Franchise Revenue</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Revenues from the operation of company-operated restaurants are
recognized as food and beverage products are delivered to customers
and payment is tendered at the time of sale. The Company presents
sales net of sales-related taxes and promotional allowances.
Promotional allowances amounted to approximately $5.7 million and
$4.0 million during the years ended December 25, 2013 and
December 26, 2012, respectively. Franchise revenue consists of
franchise royalties, initial franchise fees, license fees due from
franchisees, IT support services and rental income for leases and
subleases to franchisees. Franchise royalties are based upon a
percentage of net sales of the franchisee and are recorded as
income as such sales are earned by the franchisees. Initial
franchise and license fees are recognized when all material
obligations have been performed and conditions have been satisfied,
typically when operations of the franchised restaurant have
commenced. Initial franchise fees recognized during the years ended
December 25, 2013 and December 26, 2012, totaled $521,000
and $186,000, respectively. The Company recognizes renewal fees
when a renewal agreement with a franchisee becomes effective.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Advertising Costs</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Advertising expense is recorded as the obligation to contribute to
the advertising fund is created, generally when the associated
revenue is recognized. Advertising expense, which is a component of
occupancy and other operating expenses, was $11.9 million and $11.2
million for the years ended December 25, 2013 and
December 26, 2012, respectively, and is net of $15.8 million
and $14.1 million, respectively, funded by the franchisees’
advertising fees.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Franchisees pay a monthly fee to the Company that ranges from 4% to
5% of their restaurants’ net sales as reimbursement for
advertising, public relations and promotional services the Company
provides. Fees received in advance of provided services are
included in other accrued expenses and current liabilities and were
$265,000 and $257,000 at December 25, 2013 and
December 26, 2012, respectively. Pursuant to
Intermediate’s Franchise Disclosure Document,
company-operated restaurants contribute to the advertising fund on
the same basis as franchised restaurants. At December 25,
2013, the Company was obligated to spend an additional $119,000 in
future periods to comply with this requirement.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Production costs of commercials, programming and other marketing
activities are charged to the advertising funds when the
advertising is first used for its intended purpose, and the costs
of advertising are charged to operations as incurred. Total
contributions and other marketing expenses, are included in
selling, general, and administrative expenses in the accompanying
consolidated statements of operations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Preopening Costs</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Preopening costs incurred in connection with the opening of new
restaurants are expensed as incurred. Preopening costs, which are
included in general and administrative expenses on the accompanying
consolidated statements of operations, were $201,000 and $320,000
for the years ended December 25, 2013 and December 26,
2012, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Franchise Area Development Fees</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company receives area development fees from franchisees when
they execute multi-unit area development agreements. The Company
does not recognize revenue from the agreements until the related
restaurants open or at the time the development agreements expire,
if the required units are not opened. Unrecognized area development
fees totaled $90,000 and $210,000 at December 25, 2013 and
December 26, 2012, respectively, and are included in other
accrued expenses and current liabilities and other noncurrent
liabilities in the accompanying consolidated balance sheets. As of
December 25, 2013, the Company had executed development
agreements that represent commitments to open twelve franchised
restaurants at various dates through 2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Gift cards</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company sells gift cards to its customers in the restaurants
and through selected third parties. The gift cards sold to
customers have no stated expiration dates and are subject to actual
and/or potential escheatment rights in several of the jurisdictions
in which the Company operates. The Company recognizes income from
gift cards when redeemed by the customer.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Operating Leases</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Rent expense for the Company’s operating leases, which
generally have escalating rentals over the term of the lease, is
recorded on a straight-line basis over the expected lease term. The
lease term begins when the Company has the right to control the use
of the leased property, which is typically before rent payments are
due under the terms of the lease. Rent expense is included in
occupancy and other operating expenses on the consolidated
statements of operations. The difference between rent expense and
rent paid is recorded as deferred rent, which is included in other
noncurrent liabilities in the accompanying consolidated balance
sheets. Percentage rent expenses are recorded based on estimated
sales or gross margin for respective restaurants over the
contingency period.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Any leasehold improvements that are funded by lessor incentives
under operating leases are recorded as leasehold improvements and
amortized over the expected lease term. Such incentives are also
recorded as deferred rent and amortized as reductions to rent
expense over the expected lease term.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Income Taxes</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The provision for income taxes, income taxes payable and deferred
income taxes are determined using the asset and liability method.
Deferred tax assets and liabilities are determined based on
temporary differences between the financial carrying amounts and
the tax basis of assets and liabilities using enacted tax rates in
effect in the years in which the temporary differences are expected
to reverse. On a periodic basis, the Company assesses the
probability that its net deferred tax assets, if any, will be
recovered. If after evaluating all of the positive and negative
evidence, a conclusion is made that it is more likely than not that
some portion or all of the net deferred tax assets will not be
recovered, a valuation allowance is provided by a charge to tax
expense to reserve the portion of the deferred tax assets which are
not expected to be realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company reviews its filing positions for all open tax years in
all U.S. federal and state jurisdictions where the Company is
required to file.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
When there are uncertainties related to potential income tax
benefits, in order to qualify for recognition, the position the
Company takes has to have at least a “more likely than
not” chance of being sustained (based on the position’s
technical merits) upon challenge by the respective authorities. The
term “more likely than not” means a likelihood of more
than 50 percent. Otherwise, the Company may not recognize any of
the potential tax benefit associated with the position. The Company
recognizes a benefit for a tax position that meets the “more
likely than not” criterion at the largest amount of tax
benefit that is greater than 50 percent likely of being realized
upon its effective resolution. Unrecognized tax benefits involve
management’s judgment regarding the likelihood of the benefit
being sustained. The final resolution of uncertain tax positions
could result in adjustments to recorded amounts and may affect our
results of operations, financial position and cash flows.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s policy is to recognize interest and/or
penalties related to income tax matters in income tax expense. The
Company had no accrual for interest or penalties at
December 25, 2013 and December 26, 2012, respectively,
and has not recognized interest and/or penalties during the years
ended December 25, 2013 and December 26, 2012,
respectively, since there are no material unrecognized tax
benefits. Management believes no material change to the amount of
unrecognized tax benefits will occur within in the next 12
months.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The tax years subject to examination by major tax jurisdictions
include the years 2010 and forward by the U.S. Internal Revenue
Service, and the years 2009 and forward for various states.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Fair Value Measurements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Financial assets and
liabilities carried at fair value are classified and disclosed in
one of the following three categories:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td width="5%"> </td>
<td valign="top" width="2%" align="left">•</td>
<td valign="top" width="1%"> </td>
<td valign="top" align="left">Level 1: Quoted prices for identical
instruments in active markets.</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td width="5%"> </td>
<td valign="top" width="2%" align="left">•</td>
<td valign="top" width="1%"> </td>
<td valign="top" align="left">Level 2: Quoted prices for similar
instruments in active markets; quoted prices for identical or
similar instruments in markets that are not active; and
model-derived valuations whose inputs or significant value drivers
are observable.</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td width="5%"> </td>
<td valign="top" width="2%" align="left">•</td>
<td valign="top" width="1%"> </td>
<td valign="top" align="left">Level 3: Unobservable inputs used
when little or no market data is available.</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
As of December 25, 2013 and December 26, 2012, the
Company had no assets and liabilities measured at fair value on a
recurring basis, except for two interest rate caps (which are Level
3 assets), which are not material.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Fair Value of Financial Instruments</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The carrying amounts of cash and cash equivalents, restricted cash,
accounts receivable, accounts payable and certain accrued expenses
approximate fair value due to their short term maturities. The
recorded values of notes payable approximate fair value, as
interest approximates market rates (Level 3 measurement). The
recorded value of other notes payable and senior secured notes
payable approximates fair value, based on borrowing rates currently
available to the Company for loans with similar terms and remaining
maturities (Level 3 measurement).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Stock Based Compensation</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Accounting literature requires the recognition of compensation
expense using a fair-value based method for costs related to all
share-based payments including stock options and stock issued under
the Company’s employee stock plans. The guidance also
requires companies to estimate the fair value of share-based
payment awards on the date of grant using an option-pricing model.
The cost is recognized on a straight-line basis over the period
during which an employee is required to provide service, usually
the vesting period. For options that are based on a performance
requirement, the cost is recognized on an accelerated basis over
the period in which the performance criteria relate.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Earnings per share</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Earnings per share (“EPS”) is calculated using the
weighted average number of common shares outstanding during each
period. Diluted EPS assumes the conversion, exercise or issuance of
all potential common stock equivalents unless the effect is to
reduce a loss or increase the income per share. For purposes of
this calculation, options are considered to be common stock
equivalents and are only included in the calculation of diluted
earnings per share when their effect is dilutive. The shares used
to compute basic and diluted net income per share represent the
weighted-average common shares outstanding.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Recent Accounting Pronouncements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
In July 2013, the Financial Accounting Standards Board
(“FASB”) issued ASU No. 2013-11, <i>Presentation
of an Unrecognized Tax Benefit When a Net Operating Loss
Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward
Exists</i> (ASU 2013-11), to require that in certain cases, an
unrecognized tax benefit, or portion of an unrecognized tax
benefit, should be presented in the financial statements as a
reduction to a deferred tax asset for a net operating loss
carryforward, a similar tax loss, or a tax credit carryforward when
such items exist in the same taxing jurisdiction. ASU 2013-11 is
effective for fiscal years, and interim periods within those years,
beginning after December 15, 2013. The Company does not
believe the adoption of this standard will have a significant
impact on the Company’s consolidated financial
statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Reclassifications</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Certain reclassifications were made to the prior year consolidated
financial statements to conform to current year presentation.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>12. STOCK-BASED COMPENSATION</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
As of December 25, 2013 and December 26, 2012, options to
purchase 3,338,096 and 3,472,539 shares, respectively, of common
stock of the Company were outstanding. Included in the
December 25, 2013 amount are 1,709,748 options that are fully
vested. The remaining options vest over time or upon the
Company’s attaining annual financial goals. However, upon the
occurrence of an initial public offering or a change in control of
the Company, the vesting may be accelerated as deemed appropriate
at the sole discretion of the board. In fiscal 2013 and 2012, the
Company granted 535,238 and 2,126,677 options with an exercise
price of $5.84 which is greater than the fair value of the common
stock on the date of grant. The options generally expire 10 years
from the date of grant. As of December 25, 2013, 2,062,448
premium options remain outstanding. In fiscal 2013 and 2012, the
Company granted 267,619 and 1,063,343 options with an exercise
price equal to the fair value of the common stock on the date of
grant. Of the total options granted in fiscal 2013 and 2012, 50%
are performance based and vest according to whether certain
financial targets are met, and the remaining 50% vest over four and
three years, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Changes in stock options for the years ended December 25, 2013
and December 26, 2012 are as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Shares</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Weighted-<br />
Average<br />
Exercise Price</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Outstanding—December 28, 2011</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">576,370</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9.74</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Grants</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,190,019</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4.77</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Exercised</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(8,093</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1.18</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Forfeited, cancelled or expired</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(285,757</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">9.23</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Outstanding—December 26, 2012</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,472,539</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5.23</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Grants</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">802,857</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5.25</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Exercised</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Forfeited, cancelled or expired</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(937,300</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4.98</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Outstanding—December 25, 2013</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">3,338,096</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">5.31</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Vested and expected to vest at December 25, 2013</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">3,338,096</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">    5.31</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Exercisable at December 25, 2013</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,709,748</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">5.36</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Stock options at December 25, 2013 are summarized as
follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2"><b>Range of<br />
Exercise<br />
Prices</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Number<br />
Outstanding</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Weighted-<br />
Average<br />
Remaining<br />
Contractual<br />
Life (in Years)</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Weighted-<br />
Average<br />
Exercise<br />
Price</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Number<br />
Exercisable</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><b>Weighted-<br />
Average<br />
Exercise<br />
Price</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 9.5pt">1.81 – $  4.09</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,057,279</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8.43</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">    2.98</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">533,551</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">    2.69</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 9.5pt">5.84 –   10.09</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,157,703</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8.32</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6.02</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,110,247</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6.20</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 9.5pt">12.71 –   12.72</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">123,113</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">3.02</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">12.71</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">65,950</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">12.71</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 9.5pt">1.81 – $12.72</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 9.5pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">3,338,096</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">8.16</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">5.31</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,709,748</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">5.36</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The intrinsic value of options outstanding and options exercisable,
calculated as the difference between the market value as of
December 25, 2013 and the exercise price, are $13.9 million
and $7.1 million, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Options are accounted for as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Employee Options</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company expenses the estimated fair value of employee stock
options and similar awards based on the grant-date fair value of
the award. For options that are based on a service requirement, the
cost is recognized on a straight-line basis over the period during
which an employee is required to provide service, usually the
vesting period. The options granted in fiscal 2012 had a three year
vesting period while the options granted in fiscal 2013 had a four
year vesting period. For options that are based on a performance
requirement, the cost is recognized over the period which the
performance criteria relate to. The Company has authorized
5,521,037 shares of common stock for issuance in connection with
stock options. As of December 25, 2013, 503,124 were available
for grant.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
In order to meet the fair value measurement objective, the Company
utilizes the Black-Scholes option-pricing model to value
compensation expense for share-based awards and has developed
estimates of various inputs including forfeiture rate, expected
term life, expected volatility, and risk-free interest rate. The
forfeiture rate is based on historical rates and reduces the
compensation expense recognized. The expected term of options
granted is derived from the simplified method. The risk-free
interest rate is based on the implied yield on a U.S. Treasury
constant maturity with a remaining term equal to the expected term
of the Company’s employee stock options. Expected volatility
is based on the comparative industry entity data. The Company does
not anticipate paying any cash dividends in the foreseeable future
and therefore uses an expected dividend yield of zero for option
valuation. The volatility factor was determined based on four
publicly-traded companies which are in the same market category as
the Company. The peer companies were selected based on similarity
of market capitalization, size and certain operating
characteristics. The calculated volatility was established by
taking the historical daily closing values prior to grant date,
over a period equal to the expected term, for each of the peer
companies.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The weighted-average estimated fair value of employee stock options
granted during the year ended December 25, 2013 was $1.40 per
share using the Black-Scholes model with the following
weighted-average assumptions used to value the option grants:
Expected volatility of 40.6%; Expected life of 6.25; Risk-free
interest rates of 1.15% to 1.99%; and expected
dividends—0%.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The weighted-average estimated fair value of employee stock options
granted during the year ended December 26, 2012 was $0.60 per
share using the Black-Scholes model with the following
weighted-average assumptions used to value the option grants:
Expected volatility of 39.0%; Expected life—5.75 years;
Risk-free interest rates—1.02%; and expected
dividends—0%.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
During the years ended December 25, 2013 and December 26,
2012, the Company recognized share-based compensation expense of
$822,000 and $860,000, respectively. These expenses were included
in general and administrative expenses consistent with the salary
expense for the related optionees in the accompanying consolidated
statements of operations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
As of December 25, 2013, there was total unrecognized
compensation expense of $860,000 related to unvested stock options
which the Company expects to recognize over a weighted average
period of 1.8 years.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company has a Stockholders Agreement that provides that, under
certain circumstances, certain management holders of shares,
including shares acquired from exercise of option awards, can put
such shares to the Company at fair market value. Because the events
that could trigger the right to put are not within the control of
the management holders, such option awards are classified as
liabilities only when the condition that could trigger the put
right is probable of occurring. As of December 25, 2013, the
Company concluded that the contingent events are not probable and
therefore the option awards are classified as equity. The
Company’s Stockholders Agreement also provides the Company
with call rights if a management holder leaves the Company for
various reasons. The Company has sufficient authorized capital, has
the ability to deliver shares, and does not have a practice of
repurchasing shares for cash. Upon the completion of a qualified
initial public offering, the related shares will no longer be
puttable or callable.</p>
</div>
-0.59
0.350
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Impairment of Long-Lived Assets</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company reviews its long-lived assets for impairment on a
restaurant-by-restaurant basis whenever events or changes in
circumstances indicate that the carrying value of certain assets
may not be recoverable. If the Company concludes that the carrying
value of certain assets will not be recovered based on expected
undiscounted future cash flows, an impairment write-down is
recorded to reduce the assets to their estimated fair value. The
Company recorded non-cash impairment charges of $27,000 and $42,000
for the years ended December 25, 2013 and December 26,
2012, respectively.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>5. LEASES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s operations utilize property, facilities,
equipment and vehicles owned by the Company or leased from others.
Buildings and facilities leased from others are primarily for
restaurants and support facilities. Restaurants are operated under
lease arrangements that generally provide for a fixed base rent
and, in some instances, contingent rent based on a percentage of
gross operating profit or gross revenues in excess of a defined
amount. Initial terms of land and restaurant building leases
generally are not less than 20 years, exclusive of options to
renew. Leases of equipment primarily consist of restaurant
equipment, computer systems and vehicles. The Company subleases
facilities to certain franchisees and other non-related parties
which are recorded on a straight-line basis.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
Information regarding the Company’s future lease obligations
at December 25, 2013 is as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="61%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
 <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Capital
Leases</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Operating
Leases</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom"><b>For
the Years Ending</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Minimum<br />
Lease<br />
Payments</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Minimum<br />
Sublease<br />
Income</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Minimum<br />
Lease<br />
Payments</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Minimum<br />
Sublease<br />
Income</b></td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 31, 2014</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">416</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">115</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,645</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,004</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 30, 2015</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">320</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">72</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">17,203</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">704</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 28, 2016</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">258</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">72</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,982</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">595</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 27, 2017</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">199</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,431</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">511</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 26, 2018</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">172</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,851</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">354</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Thereafter</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">249</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">78,248</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">116</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">1,614</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">287</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">159,360</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">3,284</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: imputed interest (11.0% to 14.8%)</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(500</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Present value of capital lease obligations</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,114</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: current maturities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(267</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Noncurrent portion</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">847</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Net rent expense is as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Base rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,732</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,331</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Contingent rent</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">491</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">418</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: sublease income</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(3,602</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(3,489</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net rent expense</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">15,621</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">15,260</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Base rent and contingent rent are included in occupancy and other
operating expenses, while sublease income is included in franchise
revenue in the accompanying consolidated statements of operations.
Sublease income includes contingent rental income of $1.7 million
and $1.6 million for the years ended December 25, 2013 and
December 26, 2012, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company is a lessor for certain property, facilities and
equipment owned by the Company and leased to others, principally
franchisees, under noncancelable leases with initial terms ranging
from three to nine years. The lease agreements generally provide
for a fixed base rent and, in some instances, contingent rent based
on a percentage of gross operating profit or gross revenues. Total
rental income, included in franchise revenue in the accompanying
consolidated statements of operations, for leased property was
$377,000 and $366,000 for the years ended December 25, 2013
and December 26, 2012, respectively.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Minimum future rental income for company-operated properties under
noncancelable operating leases, which is recorded on a
straight-line basis, in effect as of December 25, 2013 is as
follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="93%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><b>For the Years Ending</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 31, 2014</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">244</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 30, 2015</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">215</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 28, 2016</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">101</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 27, 2017</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">84</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
December 26, 2018</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">84</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total future minimum rental income</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">728</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
On or about February 24, 2014
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Recent Accounting Pronouncements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
In July 2013, the Financial Accounting Standards Board
(“FASB”) issued ASU No. 2013-11, <i>Presentation
of an Unrecognized Tax Benefit When a Net Operating Loss
Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward
Exists</i> (ASU 2013-11), to require that in certain cases, an
unrecognized tax benefit, or portion of an unrecognized tax
benefit, should be presented in the financial statements as a
reduction to a deferred tax asset for a net operating loss
carryforward, a similar tax loss, or a tax credit carryforward when
such items exist in the same taxing jurisdiction. ASU 2013-11 is
effective for fiscal years, and interim periods within those years,
beginning after December 15, 2013. The Company does not
believe the adoption of this standard will have a significant
impact on the Company’s consolidated financial
statements.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>3. PROPERTY AND EQUIPMENT</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The costs and related accumulated depreciation and amortization of
major classes of property are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="56%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,186</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
13,186     </td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings and improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">78,181</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
71,468     </td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other property and equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">46,079</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
42,868     </td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Construction in progress</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">815</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">690     </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
      138,261</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
        128,212     </td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated depreciation and amortization</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(69,620</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(63,404)    </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">68,641</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">64,808     </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Depreciation expense was $10.2 million and $9.5 million for the
years ended December 25, 2013 and December 26, 2012,
respectively. Gross value of assets under capital leases was
$1,884,000 and $1,937,000 at December 25, 2013 and
December 26, 2012, respectively. Accumulated depreciation
expense for assets under capital leases was $1,703,000 and
$1,693,000 for the years ended December 25, 2013 and
December 26, 2012, respectively. For the year ended
December 25, 2013, capital expenditures related to restaurant
remodeling and new restaurant expenditures totaled $11.3 million,
which consisted of $9.0 million and $2.3 million, respectively.</p>
</div>
These restricted dividend payments include, but are not limited to: (i) dividends payable solely in EPL’s own common stock or other common equity interests, (ii) payments that permit Intermediate to repurchase or redeem qualified capital stock of Intermediate held by present or former officers, directors or employees, not to exceed $1,000,000 in any fiscal year (with unused amounts carried over to the next fiscal year), and (iii) provided that no default or event of default under the credit facilities has occurred, is continuing, or would result therefrom, dividends limited to various absolute ceiling amounts, including an aggregate amount up to $5,000,000 (shared with Intermediate) for dividends not including those paid pursuant to stock options and other benefit plans.
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Accounts and Other Receivables, Net</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Accounts and other receivables consist primarily of royalties,
advertising and sublease rent and related amounts receivable from
franchisees which are due on a monthly basis that may differ from
the Company’s month-end dates as well as credit/debit card
receivables. The need for an allowance for doubtful accounts is
reviewed on a specific identification basis based upon past due
balances and the financial strength of the obligor. Bad debt
expense was immaterial for the years ended December 25, 2013 and
December 26, 2012.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Concentration of Risk</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Cash and cash equivalents are maintained at financial institutions
and, at times, balances may exceed federally insured limits. The
Company has never experienced any losses related to these
balances.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company had two suppliers for which amounts due at
December 25, 2013 and December 26, 2012 totaled 45% and
51% and 11% and 13%, respectively, of the Company’s accounts
payable. Purchases from the same suppliers for the years ended
December 25, 2013 and December 26, 2012 totaled 31% and
13% and 24% and 15%, respectively, of the Company’s
purchases. Company-operated and franchised restaurants in the
greater Los Angeles area generated, in the aggregate, approximately
80% and 81% of revenue for the years ended December 25, 2013
and December 26, 2012, respectively.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>11. EMPLOYEE BENEFIT PLANS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company sponsors a defined contribution employee benefit plan
that permits its employees, subject to certain eligibility
requirements, to contribute up to 25% of their qualified
compensation to the plan. The Company matches 100% of the
employees’ contributions of the first 3% of the
employees’ annual qualified compensation, and 50% of the
employees’ contributions of the next 2% of the
employees’ annual qualified compensation. The Company’s
matching contribution immediately fully vests. The Company’s
contributions to the plan for the years ended December 25,
2013, and December 26, 2012, were $447,000 and $396,000,
respectively.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Fair Value Measurements</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Financial assets and
liabilities carried at fair value are classified and disclosed in
one of the following three categories:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td width="5%"> </td>
<td valign="top" width="2%" align="left">•</td>
<td valign="top" width="1%"> </td>
<td valign="top" align="left">Level 1: Quoted prices for identical
instruments in active markets.</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td width="5%"> </td>
<td valign="top" width="2%" align="left">•</td>
<td valign="top" width="1%"> </td>
<td valign="top" align="left">Level 2: Quoted prices for similar
instruments in active markets; quoted prices for identical or
similar instruments in markets that are not active; and
model-derived valuations whose inputs or significant value drivers
are observable.</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td width="5%"> </td>
<td valign="top" width="2%" align="left">•</td>
<td valign="top" width="1%"> </td>
<td valign="top" align="left">Level 3: Unobservable inputs used
when little or no market data is available.</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
As of December 25, 2013 and December 26, 2012, the
Company had no assets and liabilities measured at fair value on a
recurring basis, except for two interest rate caps (which are Level
3 assets), which are not material.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Fair Value of Financial Instruments</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The carrying amounts of cash and cash equivalents, restricted cash,
accounts receivable, accounts payable and certain accrued expenses
approximate fair value due to their short term maturities. The
recorded values of notes payable approximate fair value, as
interest approximates market rates (Level 3 measurement). The
recorded value of other notes payable and senior secured notes
payable approximates fair value, based on borrowing rates currently
available to the Company for loans with similar terms and remaining
maturities (Level 3 measurement).</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Liquidity</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company’s principal liquidity requirements are to service
its debt and meet capital expenditure needs. At December 25,
2013, the Company’s total debt (including capital lease
liabilities) was $289.2 million. The Company’s ability to
make payments on its indebtedness and to fund planned capital
expenditures will depend on available cash and its ability to
generate adequate cash flows in the future, which, to a certain
extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond the
Company’s control. Based on current operations, the Company
believes that its cash flows from operations, available cash of
$17.0 million at December 25, 2013 and available
borrowings under the credit facility (which availability was $7.7
million at December 25, 2013) will be adequate to meet the
Company’s liquidity needs for the next 12 months.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Other accrued expenses and current liabilities consist of the
following (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Accrued sales and property taxes</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
    3,190</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">    3,010</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,635</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">4,230</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Total other accrued expenses and current liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">7,825</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">7,240</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Reclassifications</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Certain reclassifications were made to the prior year consolidated
financial statements to conform to current year presentation.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The costs and related accumulated depreciation and amortization of
major classes of property are as follows (in thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="56%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,186</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">
13,186     </td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings and improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">78,181</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
71,468     </td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other property and equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">46,079</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
42,868     </td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Construction in progress</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">815</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">690     </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
      138,261</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">
        128,212     </td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Less: accumulated depreciation and amortization</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(69,620</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(63,404)    </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">68,641</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">64,808     </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
2300000
1700000
94000
6300000
229000
11300000
7913000
123000
-95000
-33000
1319000
-15472000
-868000
521000
9000000
26000
42392000
600000
-868000
314727000
282196000
8097000
13822000
3602000
-16873000
34427000
20400000
822000
294327000
-21530000
400000
1139000
27000
1371000
595000
36334000
272735000
35000
2007000
334000
3841000
5000
444000
6912000
288050000
3753000
-4472000
75669000
1401000
18732000
15621000
1348000
5700000
93589000
10200000
10213000
-10385000
30000
447000
-4301000
-13787000
232408000
11900000
30000
-101000
25506000
1294000
491000
-128000
822000
0
-213000
1037000
27000
63150000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The estimated useful service lives are as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="66%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Buildings</p>
</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" align="right">20 years</td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Land improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 30 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Building improvements</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Restaurant equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Other equipment</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2 – 10 years</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Leasehold improvements</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">
Shorter of useful life or lease term</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Insurance Reserves</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company is responsible for workers’ compensation, general
and health insurance claims up to a specified aggregate stop loss
amount. The Company maintains a reserve for estimated claims both
reported and incurred but not reported, based on historical claims
experience and other assumptions. At December 25, 2013 and
December 26, 2012, the Company had accrued $3,597,000 and
$3,153,000, respectively, and such amounts are reflected as accrued
insurance in the accompanying consolidated balance sheets. The
expense for such reserves for the years ended December 25,
2013 and December 26, 2012 totaled $6,912,000 and $8,361,000,
respectively. These amounts are included in payroll and benefits
and general and administrative expenses on the accompanying
consolidated statements of operations.</p>
</div>
8400000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt; TEXT-INDENT: 4%">
The deferred tax amounts mentioned above have been classified on
the accompanying consolidated balance sheets as follows (in
thousands):</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Current:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Liabilities</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(322</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(334</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Noncurrent:</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Liabilities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(31,623</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(30,240</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(31,945</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(30,574</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Franchise Area Development Fees</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Company receives area development fees from franchisees when
they execute multi-unit area development agreements. The Company
does not recognize revenue from the agreements until the related
restaurants open or at the time the development agreements expire,
if the required units are not opened. Unrecognized area development
fees totaled $90,000 and $210,000 at December 25, 2013 and
December 26, 2012, respectively, and are included in other
accrued expenses and current liabilities and other noncurrent
liabilities in the accompanying consolidated balance sheets. As of
December 25, 2013, the Company had executed development
agreements that represent commitments to open twelve franchised
restaurants at various dates through 2015.</p>
</div>
1709748
P9Y
0.05
P10Y
P30Y
P10Y
P10Y
P20Y
P18Y
P3Y
P20Y
0.04
P3Y
P3Y
P3Y
P2Y
P1Y
P1Y
1.40
0.00
P6Y3M
0.0115
P4Y
0.406
0.0199
0.11
0.24
0.45
0.31
2
0.80
2
2015
2016
1.00
0.03
0.50
0.02
4
201000
2007000
P20Y
Shorter of useful life or lease term
-16873000
-16873000
822000
822000
P9Y
P4Y
0
15800000
377000
2005-11-18
624000000
500000000
4.09
1.81
P8Y5M5D
267619
12.72
1.81
P8Y1M28D
12.72
12.71
P3Y7D
10.09
5.84
P8Y3M26D
535238
5.84
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>7. PRIOR CREDIT AGREEMENTS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On July 14, 2011 the Company entered into a credit agreement
(“Prior Credit Agreement”) that included a $170 million
Senior Secured Term Loan (the “Prior Term Loan”) that
was due to mature in July 2017 and a senior secured revolving
credit facility of $12.5 million (the “Prior Revolver,”
and together with the Term Loan, the “Prior Senior Credit
Facility”) that was due to mature in July 2016. EPL also
issued $105 million of 17% second priority senior secured notes due
January 2018 (“2018 Notes”).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Prior Credit Agreement was executed with Intermediate as
guarantor. The Senior Credit Facility was secured by a first
priority lien on substantially all of EPL’s and
Intermediate’s assets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>Prior Senior Credit Facility</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Prior Term Loan required quarterly principal payments of
$425,000 that commenced on September 28, 2011. The Prior Term
Loan bore interest, at an Alternate Base Rate, as defined, or
LIBOR, at EPL’s option, plus an applicable margin. The
applicable margin rate was 7.75% with respect to electing a LIBOR
rate and 6.75% with respect to electing the Alternate Base Rate.
There was a 1.50% floor on the LIBOR rate. Interest was due on loan
amounts under both LIBOR and Alternate Base Rate elected rates on a
monthly basis. The Term Loan was issued at a discount of $5.1
million, and this discount was being accreted over the term of the
loan, using the effective interest method.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The Revolver provided for a $12.5 million revolving line of credit.
The Revolver bore interest, payable monthly, at an Alternate Base
Rate or LIBOR, at EPL’s option, plus an applicable margin.
The applicable margin rate was 6.50% with respect to LIBOR and
5.50% with respect to Alternate Base Rate advances. There was a
1.50% floor on the LIBOR rate. Interest was due on loan amounts
under both LIBOR and Alternate Base Rate elected rates on a monthly
basis.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
In conjunction with the October 11, 2013 refinancing of
EPL’s debt, call premiums of $3.3 million were incurred in
connection with the repurchase of the Prior Senior Credit Facility.
In addition, the Company expensed $5.1 million of the remaining
unamortized deferred finance costs and wrote off $3.2 million of
unamortized discount, associated with the Prior Senior Credit
Facility. These costs were expensed and are reflected in loss on
early extinguishment of debt in the accompanying consolidated
statements of operations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
<b>Second Priority Senior Secured Notes (“2018
Notes”)</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The 2018 Notes bore cash interest of 12.5% per annum, which
was due semi-annually in January and July of each year, which
commenced on January 1, 2012. An additional 4.5% non-cash
interest amount accrued on the 2018 Notes, which was added to the
principal amount of the 2018 Notes on each interest payment date.
The 2018 Notes were issued at a discount of $3.2 million, and this
discount was accreted over the term of the notes, using the
effective interest rate method. The 2018 Notes were unconditionally
guaranteed by Intermediate and each existing and subsequently
acquired wholly-owned domestic subsidiary of EPL. The 2018 Notes
were due to mature on January 10, 2018.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
In conjunction with the October 11, 2013 refinancing of
EPL’s debt, call premiums of $4.6 million were incurred in
connection with the repurchase of the 2018 Notes. In addition, the
Company expensed $3.2 million of the remaining unamortized deferred
finance costs and wrote off $2.0 million of the remaining
unamortized discount, associated with the Prior Senior Credit
Facility. These costs were expensed and are reflected in loss on
early extinguishment of debt in the accompanying consolidated
statements of operations.</p>
</div>
A new first lien credit agreement ("First Lien Credit Agreement") that includes a $190 million Senior Secured Term Loan ("First Lien Term Loan") and a senior secured revolving credit facility of $15 million ("Revolver") that, in each case, matures in October, 2018,
A new second lien credit agreement ("Second Lien Credit Agreement" and together with the First Lien Credit Agreement, the "Credit Agreements") that includes a $100 million Second Lien Term Loan ("Second Lien Term Loan") and together with the First Lien Term Loan, (the "Term Loans") that matures in April 2019.
1.00
-86000
28712622
EPL may make distributions to Intermediate only under certain restricted circumstances, including, but not limited to, payments of (i) franchise taxes or other costs of maintaining the corporate existence of Intermediate, (ii) accounting, legal, administrative and operating expenses of Intermediate, up to $250,000 in any 12 month period, and (iii) EPL's allocable portion of tax liabilities on consolidated tax returns with Intermediate, subject to certain overall amounts.
-0.59
These restricted dividend payments include, but are not limited to: (i) dividends payable solely in EPL’s own common stock or other common equity interests, (ii) payments that permit Intermediate to repurchase or redeem qualified capital stock of Intermediate held by present or former officers, directors or employees, not to exceed $1,000,000 in any fiscal year (with unused amounts carried over to the next fiscal year), and (iii) provided that no default or event of default under the credit facilities has occurred, is continuing, or would result therefrom, dividends limited to various absolute ceiling amounts, including an aggregate amount up to $5,000,000 (shared with Intermediate) for dividends not including those paid pursuant to stock options and other benefit plans.
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>SCHEDULE 1</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="center"><b>CONDENSED FINANCIAL INFORMATION OF
REGISTRANT</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="center"><b>EL POLLO LOCO HOLDINGS, INC.</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="center"><b>PARENT COMPANY BALANCE SHEETS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>(Amounts in thousands, except share data)</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="74%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"> <font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Assets</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Current assets:</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Cash and cash equivalents</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">$</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,394</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">$</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,480</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Total current assets</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,394</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,480</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Investment in subsidiaries, net</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">44,142</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">60,107</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Total assets</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">48,536</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">64,587</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 1pt">
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Liabilities and Stockholders’ Equity</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Total liabilities</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Commitments and contingencies</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Stockholders’ Equity</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">
Common stock, $0.01 par value—200,000,000 shares authorized;
28,712,622 shares issued and outstanding</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">287</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">287</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">
Additional paid-in capital</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">240,151</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">239,329</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">
Accumulated deficit</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(191,902</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(175,029</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Total stockholders’ equity</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">48,536</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">64,587</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Total liabilities and stockholders’ equity</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">48,536</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">64,587</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 48pt" align="center">See notes to consolidated financial statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 1pt; MARGIN-TOP: 12pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>SCHEDULE 1</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="center"><b>EL POLLO LOCO HOLDINGS, INC.</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="center"><b>PARENT COMPANY STATEMENTS OF OPERATIONS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>(Amounts in thousands, except share data)</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="74%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>December 25,</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>2013</b></p>
</td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Revenue</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Company-operated restaurant revenue</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 10pt">—</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Franchise revenue</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 10pt">—</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Total revenue</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 10pt">—</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
General and administrative expenses</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">912</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">950</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Total expenses</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">912</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">950</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Loss from operations</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(912</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Interest income</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">15</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Loss before provision for income taxes</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(908</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(935</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Provision for income taxes</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-SIZE: 10pt">—</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Equity in earnings of subsidiaries, net of tax</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(15,965</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 10pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(6,930</font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Net loss</b></p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">(16,873</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(7,865</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Net loss per share</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Basic and diluted</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(0.59</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(0.27</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: ARIAL" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Weighted average shares used in computing net loss per
share</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Basic and diluted</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 <br /></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">28,712,622<br /></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  <br /></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 <br /></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">28,712,194<br /></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  <br /></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 48pt" align="center">See notes to consolidated financial statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 1pt; MARGIN-TOP: 12pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>SCHEDULE 1</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="center"><b>EL POLLO LOCO HOLDINGS, INC.</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="center"><b>PARENT COMPANY STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>(Amounts in thousands, except share data)</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="83%"></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" rowspan="3">  </td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" rowspan="2" colspan="6" align="center"><b>Common
Stock</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom" rowspan="2"> </td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" rowspan="3" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Additional</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Paid-in</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Capital</b></p>
</td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom" rowspan="3"> </td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" rowspan="3" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Accumulated</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Deficit</b></p>
</td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom" rowspan="3"> </td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" rowspan="3" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Total</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Stockholders’</b></p>
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>Equity</b></p>
</td>
<td style="BORDER-TOP: #000000 1.5pt solid" valign="bottom" rowspan="3"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-SIZE: 10pt"><b>Shares</b></font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-SIZE: 10pt"><b>Amount</b></font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Balance</b>, December 28, 2011</p>
</td>
<td valign="bottom"> </td>
<td valign="bottom"> <br /></td>
<td valign="bottom" align="right">28,710,070<br /></td>
<td valign="bottom" nowrap="nowrap">  <br /></td>
<td valign="bottom"> </td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">287</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">238,473</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(167,164</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
<td valign="bottom"> </td>
<td valign="bottom"><font style="FONT-SIZE: 10pt">$</font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">71,596</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Stock based compensation</p>
</td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">860</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">860</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Cash used for net stock option exercises</p>
</td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,552</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Net loss attributable to El Pollo Loco Holdings, Inc., and
subsidiaries’ common stockholders</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(7,865</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(7,865</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Balance</b>, December 26, 2012</p>
</td>
<td valign="bottom"> </td>
<td valign="bottom"> <br /></td>
<td valign="bottom" align="right">28,712,622<br /></td>
<td valign="bottom" nowrap="nowrap">  <br /></td>
<td valign="bottom"> </td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">287</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">239,329</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(175,029</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
<td valign="bottom"> </td>
<td valign="bottom"><font style="FONT-SIZE: 10pt"> </font></td>
<td valign="bottom" align="right"><font style="FONT-SIZE: 10pt">64,587</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Stock based compensation</p>
</td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">822</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">—</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">822</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Net loss attributable to El Pollo Loco Holdings, Inc., and
subsidiaries’ common stockholders</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"> </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="right">—</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(16,873</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(16,873</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 9.5pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Balance</b>, December 25, 2013</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 <br /></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">28,712,622<br /></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  <br /></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">287</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">240,151</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">(191,902</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">) </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 10pt">$</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right"><font style="FONT-SIZE: 10pt">48,536</font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap"><font style="FONT-SIZE: 10pt">  </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 48pt" align="center">See notes to consolidated financial statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 1pt; MARGIN-TOP: 12pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>SCHEDULE 1</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="center"><b>EL POLLO LOCO HOLDINGS, INC.</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 8pt" align="center"><b>PARENT COMPANY STATEMENTS OF CASH FLOWS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>(Amounts in thousands)</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="73%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap"><b>For the Years Ended</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 25,<br />
2013</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">
<b>December 26,<br />
2012</b></td>
<td style="BORDER-TOP: #000000 1.5pt solid; BORDER-BOTTOM: #000000 1px solid" valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Cash flows from operating activities</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Net loss</p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(16,873</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(7,865</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">
Adjustments to reconcile changes in net loss to net cash used in
operating activities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">16,787</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">7,790</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
Net cash used in operating activities</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(86</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(75</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Decrease in cash and cash equivalents</b></p>
</td>
<td valign="bottom"><font style="FONT-SIZE: 8pt">  </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(86</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"><font style="FONT-SIZE: 8pt"> </font></td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(75</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Cash and cash equivalents,</b> beginning of year</p>
</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,480</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">4,555</td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">
<b>Cash and cash equivalents,</b> end of year</p>
</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt">  </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">4,394</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
<font style="FONT-SIZE: 8pt"> </font></td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom">
$</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" align="right">4,480</td>
<td style="BORDER-BOTTOM: #000000 1.5pt solid" valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 48pt" align="center">See notes to consolidated financial statements.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 1pt; MARGIN-TOP: 12pt">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt" align="center"><b>SCHEDULE 1</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt" align="center"><b>EL POLLO LOCO HOLDINGS, INC.</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt" align="center"><b>NOTES TO PARENT COMPANY FINANCIAL
STATEMENTS</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>1. BACKGROUND AND BASIS OF PRESENTATION</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
The accompanying condensed financial statements include only the
accounts of El Pollo Loco Holdings, Inc.
(“Holdings”). Holdings is a Delaware corporation
headquartered in Costa Mesa, California. Holdings and its direct
and indirect subsidiaries are collectively known as the
“Company”. Investments in the Company’s
subsidiaries are accounted for under the equity method. These
parent company financial statements have been prepared in
accordance with <font style="WHITE-SPACE: nowrap">Rule 12-04</font> of <font style="WHITE-SPACE: nowrap">Regulation S-X,</font> as restricted net
assets of the Company’s subsidiaries exceed 25% of the
Company’s consolidated net assets as of December 25,
2013.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have
been condensed or omitted since this information is included in the
Company’s annual consolidated financial statements included
in this registration statement.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>2. RESTRICTED NET ASSETS OF SUBSIDIARIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Holdings has no material assets or operations. Holdings’
direct subsidiary, EPL Intermediate, Inc.
(“Intermediate”) guarantees EPL’s credit
agreements on a full and unconditional basis and Intermediate has
no subsidiaries other than EPL. EPL is a separate and distinct
legal entity, has no obligation to make funds available to
Intermediate, and currently has no restrictions that limit
distributions or dividends to be paid by EPL to Intermediate, which
ultimately limit distributions or dividends to Holdings.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
EPL may make distributions to Intermediate only under certain
restricted circumstances, including, but not limited to, payments
of: (i) franchise taxes or other costs of maintaining the
corporate existence of Intermediate, (ii) accounting, legal,
administrative and operating expenses of Intermediate, up to
$250,000 in any 12 month period, and (iii) EPL’s
allocable portion of tax liabilities on consolidated tax returns
with Intermediate, subject to certain overall amounts.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
EPL is also restricted in its dividend payments to Intermediate.
These restricted dividend payments include, but are not limited to:
(i) dividends payable solely in EPL’s own common stock
or other common equity interests, (ii) payments that permit
Intermediate to repurchase or redeem qualified capital stock of
Intermediate held by present or former officers, directors or
employees, not to exceed $1,000,000 in any fiscal year (with unused
amounts carried over to the next fiscal year), and
(iii) provided that no default or event of default under the
credit facilities has occurred, is continuing, or would result
therefrom, dividends limited to various absolute ceiling amounts,
including an aggregate amount up to $5,000,000 (shared with
Intermediate) for dividends not including those paid pursuant to
stock options and other benefit plans.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Likewise, Intermediate is restricted in its own dividend payments,
with such restrictions including, but not limited to, dividends
payable solely in Intermediate’s own common stock or other
common equity interests. Intermediate may purchase, redeem, or
otherwise acquire equity interests issued by it with the proceeds
received by it from the substantially concurrent issue of new
shares of its common stock or other common equity interests.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 18pt">
<b>3. COMMITMENTS AND CONTINGENCIES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
As of December 25, 2013 and December 26, 2012, El Pollo Holdings,
Inc. had no commitments and contingencies, other than those
incurred through its direct and indirect subsidiaries.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
<b>4. STOCK SPLIT AND AUTHORIZATION OF ADDITIONAL SHARES</b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
On July 14, 2014, the Company amended its certificate of
incorporation to increase the number of shares the Company is
authorized to issue to 200,000,000 shares of common stock, par
value $0.01 per share. The amendment of the certificate of
incorporation effected an internal recapitalization pursuant to
which the Company effected an 8.56381-for-1 stock split on its
outstanding common stock.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt; TEXT-INDENT: 4%">
Accordingly, all common share and per share amounts in these parent
company financial statements and the notes thereto have been
adjusted to reflect the 8.56381-for-1 stock split as though it had
occurred at the beginning of the initial period presented.</p>
</div>
4000
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822000
912000
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912000
16787000
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218356
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788000
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5297000
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980000
18972000
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23705000
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