Fiesta On Hook For $11.8 Million in Leases For Restaurants It Doesn’t Own
Restaurant group is liable for restaurant leases it doesn’t operate or franchise.
November 12, 2021
Fiesta Restaurant (FRGI) sold its Taco Cabana subsidiary to YTC Enterprises earlier this year. As part of the deal, Fiesta agreed to guarantee 14 Taco Cabana restaurant property leases with lease terms expiring on various dates through 2030. In its latest 10-Q, Fiesta quantified the liability should YTC fail to pay any sums due under the leases:
“The maximum potential amount of future undiscounted rental payments the Company could be required to make under these leases at October 3, 2021 was $11.8 million.”
Even though the leases Fiesta has guaranteed expire between now and 2030, Fiesta could remain liable for longer if any of the leaders that contain renewal options are renewed. Of the 14 leases for which it is responsible, Fiesta says one is no longer operating as of October 3, 2021.
Related: LOCO, JBX
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