Note 8 – Nonconsolidated Variable Interest Entities and Related Party Transactions

As of March 31, 2020 and December 31, 2019, the Company owned interests in the following companies, which directly or indirectly operate a restaurant:

Bagatelle Investors is a holding company that has an interest in Bagatelle NY. The Company records its retained interests in Bagatelle Investors and Bagatelle NY as cost method investments as the Company has determined that it does not have the ability to exercise significant influence over its investees, Bagatelle Investors and Bagatelle NY. As of March 31, 2020 and December 31, 2019, the Company has zero carrying value in these cost method investments.    

Additionally, the Company has a management agreement with Bagatelle NY. Under this agreement, the Company recorded less than $0.1 million of management fee revenue in each of the three months ended March 31, 2020 and 2019, respectively. The Company also receives rental income from Bagatelle NY for restaurant space that it subleases to Bagatelle NY. Rental income of approximately $0.1 million was recorded from this entity for each of the three months ended March 31, 2020 and 2019, respectively.

Net receivables from the Bagatelle Investors and Bagatelle NY included in due from related parties, net were approximately $0.4 million and $0.3 million as of March 31, 2020 and December 31, 2019, respectively. These receivables represent the Company’s maximum exposure to loss.