Commitments and contingencies |
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| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and contingencies |
Commitments and contingencies:
Operating leases:
The Company is obligated under several operating leases for the restaurants, equipment and office space, expiring in various years through 2035, which provide for minimum annual rentals, escalations, percentage rent, common area expenses or increases in real estate taxes.
Future minimum rental commitments under the leases and minimum future rental income per the sublease in five years subsequent to 2015 and thereafter are as follows:
Rent expense (including percentage rent of $369,126 and $433,194), included in continued operations, amounted to $4,909,851 and $3,432,364 in 2015 and 2014, respectively. Rent expense included in continuing operations has been reported in the consolidated statements of operations and comprehensive loss net of rental income of $795,895 and $517,155 in 2015 and 2014, respectively, related to subleases with related and unrelated parties which expires through 2025.
The CEO of the Company is a limited personal guarantor of the leases for the STK Miami premises with respect to certain covenants under the lease relating to construction of the new premises and helping the landlord obtain a new liquor license for the premises in the event of termination of the lease. The CEO is a limited personal guarantor of the leases for the Bagatelle New York premises with respect to JEC II, LLC’s payment and performance under the lease.
License and management fees:
Pursuant to its amended and restated operating agreement executed in June 2007, Bridge Hospitality, LLC is obligated to pay management fees equal to 2% of revenues to a member for the life of the lease. Management fees amounted to $39,675 and $81,608 in 2015 and 2014, respectively. Included in accounts payable at December 31, 2015 and 2014 are amounts due for management fees of $542 and $8,180, respectively.
In January 2010, STK Vegas entered into a management agreement with a third party for a term of 10 years, with two five-year option periods. Under this agreement, STK Vegas shall receive a management fee equal to 5% of gross sales, as defined (“gross sales fee”) plus 20% of net profits prior to the investment breakeven point date and 43% of net profits thereafter (“incentive fee”). The Company has elected to receive a credit against a portion of its obligation (estimated at approximately $387,000) to fund the build-out in lieu of receiving the $200,000. Management fees amounted to $4,628,231 and $4,527,808 in 2015 and 2014, respectively.
In July 2009, One 29 Park Management entered into an agreement with a third party. Under this agreement, One 29 Park Management shall receive a management fee equal to 5% of gross revenues, as defined, from the restaurant, banquets, room service and rooftop sales and 50% of the base beverage fee, as defined, for the life of the management agreement which expires in 2025. Management fees amounted to $576,401 and $642,807 in 2015 and 2014, respectively.
In July 2010, Hip Hospitality UK entered into a management agreement with a third party to manage and operate the food and beverage operations in the Hippodrome Casino in London. Under this agreement, Hip Hospitality UK shall receive a management fee equal to 5.5% of total revenue, as defined, as well as an incentive fee if certain conditions are met, for the life of the management agreement which expires in 2022. Management fees amounted to $602,049 and $703,648 in 2015 and 2014, respectively. Included in accounts receivable at December 31, 2015 and 2014 are amounts due for management fees and reimbursable expenses of $443,989 and $377,320, respectively.
In December 2011, TOG Aldwych entered into a management agreement with a third party to operate a restaurant, bar and lounges in the ME Hotel in London. Under this agreement, TOG Aldwych shall receive a management fee equal to 5% of receipts received from food and beverages operations. In addition, TOG Aldwych is entitled to receive a monthly marketing fee equal to 1.5% of receipts received from food and beverages operations and an additional fee equal to 65% of net operating profits, as defined, for the life of the management agreement which expires in 2032. Management fees, marketing fees and additional fees were waived in 2012. Management fees amounted to $1,532,026 and $2,229,094 in 2015 and 2014, respectively. Included in accounts receivable at December 31, 2015 and 2014 are amounts due for management fees of $449,874 and $200,124, respectively.
In May 2013, CA Aldwych entered into a management agreement with a third party to operate a restaurant in the ME Hotel in London. Under this agreement, CA Aldwych shall receive a management fee equal to 5% of receipts received from food and beverages operations. In addition, CA Aldwych is entitled to receive a monthly marketing fee equal to 1.5% of receipts received from food and beverages operations. Management fees amounted to $117,105 and $149,710 in 2015 and 2014, respectively. Included in accounts receivable at December 31, 2015 and 2014 are amounts due for management fees of $74,546 and $57,675, respectively.
In May 2015, TOG Milan entered into a management agreement with a third party to operate a restaurant in the ME Hotel in Milan. Under this agreement, TOG Milan shall receive a management fee equal to 5% of receipts received from food and beverages operations. In addition, TOG Milan is entitled to receive a monthly marketing fee equal to 1.5% of receipts received from food and beverages operations. Management fees amounted to $250,211 in 2015. Included in accounts receivable at December 31, 2015 are amounts due for management fees of $116,342. Operators preferred return of $408,511 is due the ME Hotel at December 31, 2015.
In May 2012, Heraea entered into a management agreement with a third party for a term of five years, with one five-year option period. Under this agreement, Heraea was to receive a management fee equal to 5% of gross revenues, as defined, and a profit share of gross operating profit, as defined. On May 30, 2014 the Company entered into a Termination, Mutual Release and Settlement Agreement to terminate the management agreement. The results of operations and estimated termination costs are included in Discontinued Operations.
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