Commitments and contingencies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 2031, 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 September 30, 2015 and thereafter are as follows:
Rent expense (including percentage rent of $71,428 and $101,936 for the three months ended September 30, 2015 and 2014, respectively and $239,204 and $329,545 for the nine months ended September 30, 2015 and 2014, respectively), included in continued operations, amounted to $937,700 and $779,164 for the three months ended September 30, 2015 and 2014 and $2,832,266 and $2,802,466 for the nine months ended September 30, 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 $179,186 and $188,480 for the three months ended September 30, 2015 and 2014, respectively and $545,348 and $600,099 for the nine months ended September 30, 2015 and 2014, respectively, related to subleases with related and unrelated parties which expire through 2025.
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 agreement. Management fees amounted to $258 and $19,156 for the three months ended September 30, 2015 and 2014, respectively and $39,132 and $60,324 for the nine months ended September 30, 2015 and 2014, respectively. Included in accounts payable at September 30, 2015 and December 31, 2014 are amounts due for management fees of $0 and $27,365, 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”). In addition, STK Vegas is entitled to receive a development fee equal to $200,000. 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 $1,015,876 and $1,059,993 for the three months ended September 30, 2015 and 2014, respectively, and $3,589,914 and $3,604,433 for the nine months ended September 30, 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 $148,521 and $163,199 for the three months ended September 30, 2015 and 2014, respectively, and $425,469 and $462,313 for the nine months ended September 30, 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 $148,191 and $195,792 for the three months ended September 30, 2015 and 2014, respectively, and $476,608 and $554,039 for the nine months ended September 30, 2015 and 2014, respectively. Included in accounts receivable and other assets at September 30, 2015 and December 31, 2014 are amounts due for management fees and reimbursable expenses of $313,685 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 amounted to $346,448 and $430,450 for the three months ended September 30, 2015 and 2014, respectively, and $940,997 and $1,129,341 for the nine months ended September 30, 2015 and 2014, respectively. Included in accounts receivable at September 30, 2015 and December 31, 2014 are amounts due for management fees of $929,689 and $200,124, respectively.
In June 2014, TOG (Milan) S.R.L. entered into a management agreement with Sol Melia Italia S.R.L. to operate a restaurant, rooftop bar and food and beverage services at the ME Milan Il Duca hotel in Milan, Italy. TOG (Milan) S.R.L. shall receive a management fee equal to 5% of operating revenue, as defined, and an additional fee equal to 65% of net operating revenue, as defined, for the life of the management agreement which expires in 2025. In addition, TOG (Milan) S.L.R. is entitled to receive a monthly marketing fee equal to 1.5% of operating revenues. Management fees amounted to $154,241 for the three and nine months ended September 30, 2015. Included in accounts receivable and other assets at September 30, 2015 are amounts due for management fees of $430,084.
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