BBQ (BBQ) 10-Q 14 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 02, 2017	Aug. 11, 2017
Document and entity information [Abstract]
Document type	10-Q
Document period end date	Jul. 2, 2017
Document Period Focus	Q2
Amendment flag	false
Document Fiscal Year Focus	2,017
Entity registrant name	FAMOUS DAVES OF AMERICA INC
Entity central index key	1,021,270
Entity current reporting status	Yes
Current fiscal year end date	--12-31
Entity filer category	Smaller Reporting Company
Entity common stock shares outstanding		6,957,628
TradingSymbol	DAVE

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 02, 2017	Jan. 01, 2017
Current assets:
Cash and cash equivalents	$ 5,400	$ 4,450
Restricted cash	1,640	1,714
Accounts receivable, net	5,562	5,257
Inventories	1,482	1,499
Prepaid expenses and other current assets	5,554	3,531
Assets held for sale		1
Total current assets	19,638	16,452
Property, equipment and leasehold improvements, net	20,766	25,912
Other assets:
Intangible assets, net	2,547	2,565
Deferred tax asset	4,338	4,633
Other assets	1,023	1,383
Total assets	48,312	50,945
Current liabilities:
Current portion of long-term debt and financing lease obligation	1,272	1,371
Accounts payable	5,930	5,311
Accrued compensation and benefits	1,852	1,321
Other current liabilities	3,495	3,140
Total current liabilities	12,549	11,143
Long-term liabilities:
Long-term debt, less current portion	8,392	8,849
Financing lease obligations, less current portion	1,378	2,280
Other liabilities	8,456	8,705
Total liabilities	30,775	30,977
Shareholders' equity:
Common stock, $.01 par value, 100,000 shares authorized, 6,958 shares issued and outstanding at July 2, 2017 and January 1, 2017, respectively	66	66
Retained earnings	17,471	19,902
Total shareholders' equity	17,537	19,968
Total liabilities and shareholders' equity	$ 48,312	$ 50,945

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parentheticals) - $ / shares shares in Thousands	Jul. 02, 2017	Jan. 01, 2017
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	100,000	100,000
Common stock issued (in shares)	6,958	6,958
Common Stock, Shares, Outstanding	6,958	6,958

Consolidated Statement of Opera

Consolidated Statement of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2017	Jul. 03, 2016	Jul. 02, 2017	Jul. 03, 2016
Revenue:
Restaurant sales, net	$ 20,965	$ 23,022	$ 38,942	$ 42,014
Franchise royalty revenue	4,004	4,380	7,786	8,490
Franchise fee revenue	35		35	135
Licensing and other revenue	297	336	514	584
Total Revenue	25,301	27,738	47,277	51,223
Costs and expenses:
Food and beverage costs	6,249	7,089	11,687	13,112
Labor and benefits costs	7,121	7,401	13,630	14,254
Operating expenses	5,881	6,353	11,415	12,063
Depreciation and amortization	733	956	1,488	1,936
General and administrative expenses	3,545	4,530	8,138	8,250
Asset impairment, estimated lease termination and other closing costs	3,473	1,056	4,606	1,064
Net loss on disposal of property	17	19	18	(185)
Total costs and expenses	27,019	27,404	50,982	50,494
Income from operations	(1,718)	334	(3,705)	729
Other expense:
Interest expense	(170)	(225)	(357)	(403)
Interest income		1		2
Other income (expense), net		1		1
Total other expense	(170)	(223)	(357)	(400)
Income before income taxes	(1,888)	111	(4,062)	329
Income tax expense	627	2	1,555	(67)
Net income from continuing operations	(1,261)	113	(2,507)	262
Net income (loss) from discontinued operations, net of tax		27		708
Net income (loss)	$ (1,261)	$ 140	$ (2,507)	$ 970
Income (loss) from continuing operations per basic share	$ (0.18)	$ 0.02	$ (0.36)	$ 0.04
Income loss from discontinued operations per basic share		0		0.10
Basic net income per common share	(0.18)	0.02	(0.36)	0.14
Income loss from continuing operations per diluted share	(0.18)	0.02	(0.36)	0.04
Income loss from discontinued operations per diluted share		0		0.10
Diluted net income per common share	$ (0.18)	$ 0.02	$ (0.36)	$ 0.14
Weighted average common of shares outstanding - basic	6,955	6,949	6,955	6,949
Weighted average common shares outstanding - diluted	6,955	6,958	6,955	6,958

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2017	Jul. 03, 2016
Cash flows from operating activities:
Net income from continuing operations	$ (2,507)	$ 262
Adjustments to reconcile net income to cash flows provided by operations:
Depreciation and amortization	1,488	1,936
Amortization Of Financing Costs	16	27
Net loss on disposal of property	18	(185)
Asset impairment, estimated lease termination and other closing costs	4,606	1,064
Deferred income taxes	240
Deferred rent and net amortization of lease interest assets and liabilities	273	360
Stock-based compensation	131	83
Restricted cash	74	(1,782)
Accounts receivable, net	60	(517)
Inventories	17	71
Prepaid expenses and other current assets	(2,173)	7
Deposits		(277)
Accounts payable	248	260
Accrued compensation and benefits	508	(145)
Other current liabilities	(831)	(133)
Other liabilities - operating activities	(14)	(33)
Cash flows provided by continuing operating activities	2,154	998
Cash flows used for discontinued operating activities		(783)
Cash flows provided by operating activities	2,154	215
Cash flows from investing activities:
Proceeds from the sale of assets		1,053
Purchases of property, equipment and leasehold improvements	(276)	(442)
Cash flows used for continuing investing activities	(276)	611
Cash flows provided by discontinued investing activities		1,150
Cash flows provided by (used for) investing activities	(276)	1,761
Cash flows from financing activities:
Proceeds from draws on line of credit		1,855
Payments for debt issuance costs	(15)	(23)
Payments on long-term debt and financing lease obligations	(913)	(2,800)
Cash flows used for financing activities	(928)	(968)
Increase (decrease) in cash and cash equivalents	950	1,008
Cash and cash equivalents, beginning of year	4,450	5,300
Cash and cash equivalents, end of year	$ 5,400	$ 6,308

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jul. 02, 2017
Nature Of Business And Significant Accounting Policies [Abstract]
Nature Of Business And Significant Accounting Policies [Text Block]	(1) Basis of Presentation Famous Dave’s of America, Inc. (“Famous Dave’s” or the “Company”) was incorporated in Minnesota on March 14, 1994. The Company develops, own, operates and franchises restaurants under the name "Famous Dave’s." As of July 2, 2017, there were 167 Famous Dave’s restaurants operating in 32 states, the Commonwealth of Puerto Rico, Canada, and United Arab Emirates, including 32 Company-owned restaurants and 135 franchise-operated restaurants. An additional 61 franchise-operated restaurants were committed to be developed through signed area development agreements as of July 2, 2017. These consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and Securities and Exchange Commission (“SEC”) Rules and Regulations. These unaudited consolidated financial statements represent the consolidated financial statements of the Company and its subsidiaries as of July 2, 2017 and January 1, 2017 and for the the three and six months ended July 2, 2017 and July 3, 2016. The information furnished in these consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the fiscal year ended January 1, 2017 as filed with the SEC on March 21, 2017. Due to the seasonality of the Company’s business, revenue and operating results for the three and six months ended July 2, 2017 are not necessarily indicative of the results to be expected for the full fiscal year or any other interim period. Reclassifications Certain prior period amounts have been reclassified to conform to the current period’s presentation. These reclassifications did not have an impact on the reported net income (loss) for any of the periods presented. Income Taxes The Company maintains a federal deferred tax asset (“DTA”) in the amount of $4.3 million. The Company evaluates the DTA on a quarterly basis to determine whether current facts and circumstances indicate that the DTA may not be fully realizable. As of July 2, 2017, the Company concluded that the DTA is fully realizable and that a valuation allowance was not considered necessary; however, the Company will continue to evaluate the asset on a quarterly basis until the DTA has been fully utilized. The following table presents the Company’s effective tax rates for the periods presented: Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2017 2016 2017 2016 Effective tax rate 33.2 % (1.8) % 38.3 % 20.4 % The net increase in the effective tax rate for the three and six months ended July 2, 2017 was primarily a result of the year over year change in pretax income and the impact it had on employment related credits, as a percentage of pretax income. The Company provides for income taxes based on its estimate of federal and state income tax liabilities. These estimates include, among other items, effective rates for state and local income taxes, allowable tax credits for items such as taxes paid on reported tip income, estimates related to depreciation and amortization expense allowable for tax purposes, and the tax deductibility of certain other items. The Company’s estimates are based on the information available at the time that the Company prepares the income tax provision. The Company generally files its annual income tax returns several months after its fiscal year-end. Income tax returns are subject to audit by federal, state, and local governments, generally years after the tax returns are filed. These returns could be subject to material adjustments or differing interpretations of the tax laws. Recently Adopted Accounting Pronouncements In August 2016, the FASB issued ASU 2016‑15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016‑15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flow, and other Topics. ASU 2016‑15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017. Early adoption was permitted, and the Company has adopted this ASU effective for Fiscal 2017. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers. The FASB issued ASU No. 2016‑08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” in March 2016, ASU 2016‑10 “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” in April 2016, ASU 2016‑11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014‑09 and 2014‑16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting” in May 2016 and ASU 2016‑12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” in May 2016. These new standards provide for a single, principles-based model for revenue recognition that replaces the existing revenue recognition guidance. In July 2015, the FASB deferred the effective date of ASU 2014‑09 until annual and interim periods beginning on or after December 15, 2017. It will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective. It permits the use of either a retrospective or cumulative effect transition method and early adoption is permitted. The Company plans to adopt this standard as of the effective date. The Company is completing its contract review and the evaluation of the full impact these standards will have on its consolidated financial statements and related disclosures; however, the Company believes the new guidance will impact the timing and recognition of franchise fees and advertising fees charged to franchisees, area development fees and revenues related to gift cards. In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016‑02 requires lessees to recognize a lease liability and a right-of-use asset for all leases. Lessor accounting remains largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted for all entities. ASU 2016‑02 requires a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief. The Company expects to adopt this new standard as of the effective date and is currently evaluating the impact of this new standard on its consolidated financial statements, but expects that it will have a material impact because of the Company’s significant leasing activity. In May 2017, the FASB issued ASU 2017-05, Compensation – Stock Compensation (Topic 718), to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718 to a change to the terms or conditions of a share-based payment award. The updated standard clarifies when an entity should account for the effects of a modification. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company does not believe that adoption of the new standard will have a material impact on its consolidated financial statements.

NET INCOME PER COMMON SHARE

NET INCOME PER COMMON SHARE	6 Months Ended
	Jul. 02, 2017
Earnings Per Share [Abstract]
Net Income Per Common Share [Policy Text Block]	(2) Net Income Per Share Basic net income per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding for the reporting period. Diluted EPS equals net income divided by the sum of the weighted average number of shares of common stock outstanding plus all additional common stock equivalents, such as stock options and restricted stock units, when dilutive. The following is a reconciliation of basic and diluted net income per share: Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, (in thousands, except per share data) 2017 2016 2017 2016 Net (loss) income per share – basic: Net (loss) income from continuing operations, net of taxes $ (1,261) $ 113 $ (2,507) $ 262 Net income from discontinued operations, net of taxes — 27 — 708 Net (loss) income (1,261) 140 (2,507) 970 Weighted average shares outstanding 6,955 6,949 6,955 6,949 Net (loss) income from continuing operations per share – basic $ (0.18) $ 0.02 $ (0.36) $ 0.04 Net income from discontinued operations per share – basic — 0.00 — 0.10 Net (loss) income per share – basic $ (0.18) $ 0.02 $ (0.36) $ 0.14 Net (loss) income per share – diluted: Net (loss) income from continuing operations, net of taxes $ (1,261) $ 113 $ (2,507) $ 262 Net income from discontinued operations, net of taxes — 27 — 708 Net (loss) income (1,261) 140 (2,507) 970 Weighted average shares outstanding 6,955 6,949 6,955 6,949 Dilutive impact of stock equivalents outstanding — 9 — 9 Adjusted weighted average shares outstanding 6,955 6,958 6,955 6,958 Net (loss) income from continuing operations per share – diluted $ (0.18) $ 0.02 $ (0.36) $ 0.04 Net income from discontinued operations per share – diluted — 0.00 — 0.10 Net (loss) income per share – diluted $ (0.18) $ 0.02 $ (0.36) $ 0.14 There were approximately 629,000 and 659,000 options outstanding for the three and six months ended July 2, 2017 and July 3, 2016, respectively, that were not included in the computation of diluted EPS because their impact was anti-dilutive.

RESTRICTED CASH AND MARKETING F

RESTRICTED CASH AND MARKETING FUND	6 Months Ended
	Jul. 02, 2017
Restricted Cash [Abstract]
Restricted Cash and Marketing Fund [Text Block]	(3) Restricted Cash and Marketing Fund The Company has a system-wide Public Relations and Marketing Development Fund, to which Company-owned restaurants, in addition to the majority of franchise-operated restaurants, contribute a percentage of net sales, currently 1.0%, for use in public relations and marketing development efforts throughout the system. The assets held by this fund are considered to be restricted. Accordingly, the Company reflects the cash related to this fund within restricted cash and reflects the liability within accounts payable on the Company’s consolidated balance sheets as of July 2, 2017 and January 1, 2017. The Company had approximately 1.1 million and $946,000 in this fund as of July 2, 2017 and January 1, 2017, respectively. In conjunction with the Company’s current and former credit agreements, the Company has deposited amounts for undrawn letters of credit in cash collateral accounts with Venture Bank and Wells Fargo. The Company had approximately $557,000 and $768,000 in restricted cash as of July 2, 2017 and January 1, 2017, respectively, related to these undrawn letters of credit.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

ALLOWANCE FOR DOUBTFUL ACCOUNTS	6 Months Ended
	Jul. 02, 2017
Accounts Receivable Net [Abstract]
Allowance For Credit Losses [TextBlock]	(4) Allowance for Doubtful Accounts The Company provides for an allowance for uncollectible accounts receivable based on historical losses and existing economic conditions, when relevant. The Company provides for a general bad debt reserve for franchise receivables due to increases in days sales outstanding and deterioration in general economic market conditions. This general reserve is based on the aging of receivables meeting specified criteria and is adjusted each quarter based on past due receivable balances. Additionally, the Company has periodically established a specific reserve on certain other receivables as necessary. Any changes to the reserve are recorded within general and administrative expenses on the consolidated statements of operations. The allowance for uncollectible accounts was approximately $266,000 and $270,000 at July 2, 2017 and January 1, 2017, respectively. Accounts receivable are written off when they become uncollectible, and payments subsequently received on such receivables are credited to allowance for doubtful accounts. Accounts receivable balances written off have not exceeded allowances provided. The Company believes all accounts receivable in excess of the allowance are fully collectible. If accounts receivable in excess of provided allowances are determined uncollectible, they are charged to expense in the period that determination is made. Outstanding past due accounts receivable are subject to a monthly interest charge on unpaid balances, which is recorded as interest income in the consolidated statements of operations. In assessing recoverability of these receivables, the Company makes judgments regarding the financial condition of the franchisees based primarily on past and current payment trends, as well as other variables, including annual financial information, which the franchisees are required to submit to the Company, as well as other variables.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	6 Months Ended
	Jul. 02, 2017
Intangible Assets Disclosure [Abstract]
Intangible Assets Disclosure [Text Block]	(5) Intangible Assets, net The Company has intangible assets that consist of liquor licenses and lease interest assets. The liquor licenses are indefinite-lived assets and are not subject to amortization. The lease interest assets are amortized to occupancy costs on a straight-line basis over the remaining term of each respective lease. Amortization of the lease interest assets is expected to be approximately $36,000 per year, for the remaining useful life. A reconciliation of the Company’s intangible assets as of July 2, 2017 and January 1, 2017, respectively, are presented in the table below: Remaining estimated Less Non- useful life Original Accumulated Net Book Current Current (in thousands) (years) Cost Impairment Amortization Value Portion (1) Portion Balance at July 2, 2017 Lease interest assets 22.6 $ 1,091 $ — $ (268) $ 823 $ (36) $ 787 Liquor licenses 1,760 — — 1,760 — 1,760 Total $ 2,851 $ — $ (268) $ 2,583 $ (36) $ 2,547 Remaining estimated Less Non- useful life Original Accumulated Net Book Current Current (in thousands) (years) Cost Impairment Amortization Value Portion (1) Portion Balance at January 1, 2017 Lease interest assets 23.1 $ 1,417 $ (326) $ (249) $ 842 $ (37) $ 805 Liquor licenses 1,810 (50) — 1,760 — 1,760 Total $ 3,227 $ (376) $ (249) $ 2,602 $ (37) $ 2,565 (1) The current portion is included in prepaid expenses and other current assets on the consolidated balance sheets. (2) Recorded in connection with the restaurant optimization. (3) Based upon a quantitative analysis of this intangible asset, the Company determined that the fair value of one liquor license was less than its carrying value.

LONG-TERM DEBT AND FINANCING LE

LONG-TERM DEBT AND FINANCING LEASE OBLIGATIONS	6 Months Ended
	Jul. 02, 2017
Debt Disclosure [Abstract]
Credit Facility, Long-Term Debt and Debt Covenants Disclosure [Text Block]	(6) Long-Term Debt and Financing Lease Obligations Long-term debt Long-term debt consisted approximately of the following at: July 2, January 1, (in thousands) 2017 2017 First Note - Venture Bank - monthly installments of principal and interest until December 2, 2026 3,641 3,700 Second Note - Venture Bank - monthly payments of principal and interest until December 2, 2023 5,909 6,300 Less: deferred financing fees (239) (234) Less: current maturities (919) (917) Long-term debt net of current maturities $ 8,392 $ 8,849 The weighted-average interest rate of debt outstanding as of July 2, 2017 and January 1, 2017 was 4.20% and 4.00%, respectively. The Company is subject to various financial and non-financial covenants on its long-term debt, including a debt-service coverage ratio. As of July 2, 2017, the Company was in compliance with all of its covenants. Financing Lease Obligation Financing lease obligations consisted of the following at: July 2, January 1, ( in thousands ) 2017 2017 Financing lease – Spirit Financial – monthly installments of $40 – effective interest rate of 8.81%, due in March 2019. $ 1,749 $ 2,757 Less: deferred financing fees (18) (23) Less: current maturities (353) (454) Long-term financing lease net of current maturities $ 1,378 $ 2,280

PREPAID EXPENSES AND OTHER CURR

PREPAID EXPENSES AND OTHER CURRENT ASSETS	6 Months Ended
	Jul. 02, 2017
Deferred Costs, Capitalized, Prepaid, And Other Assets Disclosure [Abstract]
Prepaid Expenses and Other Current Assets [Text Block]	(7) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following at: July 2, January 1, (in thousands) 2017 2017 Prepaid income taxes $ 3,661 $ 2,168 Prepaid insurance and other expenses 1,842 1,306 Other current assets 51 57 $ 5,554 $ 3,531

OTHER CURRENT LIABILITIES

OTHER CURRENT LIABILITIES	6 Months Ended
	Jul. 02, 2017
Accrued Liabilities, Current [Abstract]
Other Current Liabilities Disclosure [Text Block]	(8) Other Current Liabilities Other current liabilities consisted of the following at: July 2, January 1, (in thousands) 2017 2017 Gift cards payable $ 1,266 $ 1,448 Other liabilities 825 810 Lease reserves, current 800 330 Sales tax payable 368 454 Accrued real estate tax 235 79 Deferred franchise fees — 16 Accrued property and equipment purchases 1 3 $ 3,495 $ 3,140

OTHER LIABILITIES

OTHER LIABILITIES	6 Months Ended
	Jul. 02, 2017
Other Liabilities [Abstract]
Other Liabilities Disclosure [Text Block]	(9) Other Liabilities Other liabilities consisted of the following at: July 2, January 1, (in thousands) 2017 2017 Deferred rent $ 7,176 $ 7,802 Other liabilities 152 358 Asset retirement obligations 119 119 Accrual for uncertain tax position 126 139 Long term lease reserve 764 145 Long term deferred compensation 119 142 $ 8,456 $ 8,705

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Jul. 02, 2017
Performance Shares, Stock Options, Other Forms Of Compensation And Common Share Repurchaces [Abstract]
Performance Shares, Stock Options, Other Forms of Compensation and Common Share Repurchases [Text Block]	(10) Stock-based Compensation Effective May 5, 2015, the Company adopted the 2015 Equity Plan (the “2015 Plan”), pursuant to which the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and other stock and cash awards to eligible participants. The Company also maintains an Amended and Restated 2005 Stock Incentive Plan (the “2005 Plan”). Together, the 2015 Plan and 2005 Plan are referred to herein as the “Plans.” Under the 2015 Plan, an aggregate of 78,864 shares of the Company’s common stock remained unreserved and available for issuance at July 2, 2017. The 2005 Plan prohibits the granting of incentives after May 12, 2015, the tenth anniversary of the date such Plan was approved by the Company’s shareholders. Nonetheless, the 2005 Stock Incentive Plan will remain in effect until all outstanding incentives granted thereunder have either been satisfied or terminated. The Company recognized stock-based compensation expense in its consolidated statements of operations for the three and six months ended July 2, 2017 and July 3, 2016, respectively, as follows: Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, (in thousands) 2017 2016 2017 2016 Stock options (1) $ 16 $ 121 $ 116 $ 53 Restricted stock 8 15 15 30 $ 24 $ 136 $ 131 $ 83 (1) The three months ended July 2, 2017 includes the recapture of previously recorded stock-based compensation due to one of the Company’s former directors declining to stand for reelection to the Board. The six months ended July 3, 2016 includes the recapture of previously recorded stock-based compensation due to the departure of the Company’s former Chief Financial Officer. The compensation expense for stock option grants is recognized in general and administrative expense in the Company’s consolidated statements of operations through the applicable service period. Other options granted to certain non-officer employees vest in equal annual installments over a period of four years and expire either five or ten years from the grant date. Compensation expense equal to the grant date fair value is generally recognized for these awards over the vesting period. Options granted to certain non-employees in exchange for future services either vest in monthly installments over a period of approximately two years or are granted monthly and vest immediately, and expire five years from the grant date. Expense equal to the current fair value is recognized over the vesting period, with the value being marked to market in each accounting period for any unvested portions of the awards. The fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation method with the assumptions noted in the table below. Due to a lack of recent historical share option exercise experience, the Company uses a simplified method for estimating the expected life, as outlined in Accounting Standards Codification 718, calculated using the following formula: (vesting term + original contract term)/2. Expected volatilities are based on the movement of the Company’s common stock price over the most recent historical period equivalent to the expected life of the option. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. maturities over the expected life at the time of grant. Information regarding the Company’s stock options is summarized below: Weighted Average Remaining Number of Weighted Average Contractual (number of options in thousands) Options Exercise Price Life in Years Options outstanding at January 1, 2017 686 $ 9.15 5.7 Granted 55 4.29 Exercised — — Forfeited or expired (112) 12.34 Options outstanding at July 2, 2017 629 $ 8.16 Six Months Ended July 2, 2017 Fiscal 2016 Weighted-average fair value of options granted during the period $ 2.55 $ 1.97 Expected life (in years) 5.0 5.2 Expected stock volatility 60.47 % 39.98 % Risk-free interest rate 2.2 % 1.2 %

ASSET IMPAIRMENT AND ESTIMATED

ASSET IMPAIRMENT AND ESTIMATED LEASE TERMINATION AND OTHER CLOSING COSTS	6 Months Ended
	Jul. 02, 2017
Asset Impairment Charges [Abstract]
Asset Impairment, Estimated Lease Termination and Other Closing Costs [Text Block]	(11) Asset Impairment and Estimated Lease Termination and Other Closing Costs In accordance with FASB Accounting Standards Codification 360 for Property, Plant, and Equipment, the Company evaluates restaurant sites and long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of restaurant sites to be held and used is measured by a comparison of the carrying amount of the restaurant site to the undiscounted future net cash flows expected to be generated on a restaurant-by-restaurant basis. If a restaurant is determined to be impaired, the loss is measured by the amount by which the carrying amount of the restaurant’s assets exceeds its fair value. Fair value is estimated based on the best information available including estimated future cash flows, expected growth rates in comparable restaurant sales, remaining lease terms, discount rate, anticipated sale prices and other factors. If these assumptions change in the future, the Company may be required to take additional impairment charges for the related assets. Considerable management judgment is necessary to estimate future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company maintains lease reserves on locations for which the Company is the primary obligor of a lease agreement but expects to incur losses after the Company ceases to use the location. During the three and six months ended July 2, 2017, the Company recorded lease reserves and corresponding lease termination charges on Company-owned closed restaurants and franchisee-operated locations, for which the Company was the primary obligor of the lease agreement. Restaurant Optimization - During fiscal 2016, the Company recorded asset impairment charges associated with certain restaurants which were slow to respond to several initiatives to turnaround operating performance. As a result, the Company determined that the estimated fair value of the assets was less than the carrying amount and recognized impairment charges to reduce the related assets to their estimated fair value. As the Company continues to evaluate its restaurant portfolio, the Company anticipates addressing the ongoing operation of the locations impaired by way of lease restructuring, lease assignment or subsequent closure at the end of their natural lease term. During the six months ended July 2, 2017, the Company closed five restaurants as part of the Restaurant Optimization plan and, subsequent to July 2, 2017, the Company closed three additional restaurants as part of this plan. See Note 17 “Subsequent Events.” On May 2, 2017, the Company announced that it planned to accelerate refranchising or closure of its remaining Company-owned restaurants, which triggered an evaluation of each of the restaurants that the Company plans to close significantly before the end of their previously estimated useful lives. As a result of this evaluation, the Company concluded that the carrying amounts of certain of its restaurants slated for closure were not recoverable. The following is a summary of impairment costs for the three and six months ended July 2, 2017 and July 3, 2016. These costs are included in asset impairment and estimated lease termination and other closing costs in the consolidated statements of operations. Three Months Ended Six Months Ended (dollars in thousands) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Restaurant Optimization Asset impairments, net $ 3,098 $ 868 $ 3,042 $ 868 Lease termination charges (1) 353 — 1,535 — Restaurant closure expenses 22 17 29 25 Software — 171 — 171 Asset impairment, estimated lease termination and other closing costs $ 3,473 $ 1,056 $ 4,606 $ 1,064 (1) Primarily related to Chicago-area refranchised restaurants, restaurants closed during the applicable time period and former Chicago field office. See Note 14 - Variable Interest Entities.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jul. 02, 2017
Fair Value Disclosures [Abstract]
Fair Value Disclosures [Text Block]	(12) Fair Value Measurements Fair value is defined as 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. The fair value measurement framework establishes a three-tier hierarchy. The three levels, in order of priority, are as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 1 measurements are determined by observable inputs which include data sources and market prices available and visible outside of the entity. Level 2: Observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly. Level 3: Inputs that are used to estimate the fair value of the asset or liability. Level 3 measurements are determined by unobservable inputs, which include data and analysis developed within the entity to assess the fair value. For assets and liabilities falling within Level 3 of the fair value hierarchy, a change in the input assumptions used could result in a change in the estimated fair value of the asset or liability. Transfers in and out of levels will be based on the Company’s judgment of the availability of unadjusted quoted prices in active markets, other observable inputs, and non-observable inputs. The carrying amounts of cash and cash equivalents reported in the consolidated balance sheets approximates fair value based on current interest rates and short-term maturities. The carrying amount of accounts receivable approximates fair value due to the short-term nature of accounts receivable. The Company believes that the carrying amount of long-term debt approximates fair value due to the minimal difference between market interest rates and the fixed interest rate on a portion of the Company’s long-term debt, as well as that there has been no significant change in the credit risk or credit markets since origination. The following table summarizes the assets held for sale and property and equipment, net, measured at fair value in the Company’s consolidated balance sheets as of July 2, 2017 and January 1, 2017: (in thousands) Level 1 Level 2 Level 3 Total Balance at July 2, 2017 Assets Property and Equipment, net $ — $ — $ 3,387 $ 3,387 Balance at January 1, 2017 Assets Assets Held for Sale $ — $ 1 $ — $ 1 Property and Equipment, net $ — $ — $ 1,742 $ 1,742 Assets held for sale at January 1, 2017 were recorded at fair value and were valued based upon negotiated sale price (Level 2). Property and equipment, net recorded at fair value was valued based upon a broker’s estimate of value or estimated discounted future cash flows (Level 3). These assets were adjusted to net realizable value based upon the decision to dispose of the property.

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	6 Months Ended
	Jul. 02, 2017
Discontinued Operations And Disposal Groups [Abstract]
Disposal Groups Including Discontinued Operations Disclosure [Text Block]	(13) Discontinued Operations On December 14, 2015, the Company entered into an Asset Purchase Agreement and related Real Estate Purchase Agreement (the “Purchase Agreements”) with Windy City Restaurant Holdings LLC and its affiliate (together, the “Purchaser”), pursuant to which the Company agreed to sell the assets comprising its seven Chicago, Illinois area Company-owned restaurants located in Addison, Algonquin, Bolingbrook, Evergreen Park, North Riverside, Orland Park and Oswego (collectively, “Purchased Restaurants”) to the Purchaser. Pursuant to the terms of this agreement, the Company received a total purchase price of $1.15 million during the six months ended July 3, 2016, plus approximately $315,000 for the purchase of inventory on hand on the closing date. The Purchaser also assumed specified liabilities of the Company, including the Company’s existing leases for the Purchased Restaurants located in Bolingbrook, North Riverside and Orland Park, Illinois. As a result of this asset sale, the Company recognized a pretax $1.1 million gain during the six months ended July 3, 2016, primarily due to the write-off of the remaining $1.3 million deferred rent liability associated with the leases assumed by the Purchaser, discussed above. There were no assets or liabilities of the Purchased Restaurants remaining as of July 2, 2017 or January 1, 2017. The operating results of the Purchased Restaurants for the three and six months ended July 3, 2016 are summarized below. These results include costs directly attributable to the components of the businesses which were divested. There were no adjustments required to be made for the three and six months ended July 2, 2017. Three Months Ended Six Months Ended (in thousands) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Revenue $ — $ — $ — $ 2,365 Interest expense — — — 32 Income tax expense — 55 — 385 Income from discontinued operations — 15 — 1,042 Income from discontinued operations, net of income taxes — 27 — 708

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES	6 Months Ended
	Jul. 02, 2017
Variable interest entity not primary beneficiary abstract
Variable interest entity disclosure [Text Block]	(14) Variable Interest Entities A variable interest holder is considered to be the primary beneficiary of a variable interest entity (“VIE”) if it has the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. Once an entity is determined to be a VIE, the primary beneficiary is required to consolidate the entity. The Company has an installment agreement with one of its franchisees as the result of refranchising its Lincoln, Nebraska restaurant. This franchisee is a VIE; however, the owners of the franchise operations are the primary beneficiaries of the entities, not the Company. Therefore, the franchise operations are not required to be consolidated in the Company’s consolidated financial statements. On August 11, 2015, the Company consummated the sale of its Greenwood, Indiana and Florence, Kentucky restaurants. In conjunction with that agreement, the Company entered into lease assignment agreements with the respective purchasers and landlords, releasing the Company of its obligations except in the event of default by the purchasers. As of July 2, 2017, the amount of the future lease payments for which the Company would be liable in the event of a default are approximately $229,000. An accrual related to any future obligation was not considered necessary as of July 2, 2017 as the Company has determined the fair value of this guarantee was zero as there was no indication that the purchasers would not be able to pay the required lease payments. While this franchise meets the definition of a VIE, the owners of the franchise operations are the primary beneficiaries of the entities, not the Company. Therefore, the franchise operations are not required to be consolidated in the Company’s consolidated financial statements. On March 1, 2016, the Company consummated the sale of its Chicago, Illinois-area restaurants. In conjunction with that agreement, the Company entered into lease assignment agreements with the respective purchasers and three of the landlords, releasing the Company of its obligations except in the event of default by the purchasers. As of July 2, 2017, the amount of the future lease payments for which the company would be liable in the event of a default is approximately $1.7 million. As of July 2, 2017, the Company had accrued $1.0 million related to the future obligations of these restaurants. While this franchise meets the definition of a VIE, the owners of the franchise operations are the primary beneficiaries of the entities, not the Company. Therefore, the franchise operations are not required to be consolidated in the Company’s consolidated financial statements.

LITIGATION

LITIGATION	6 Months Ended
	Jul. 02, 2017
Litigation [Abstract]
Litigation Disclosure [Text Block]	(15) Litigation In the normal course of business, the Company is involved in a number of litigation matters that are incidental to the operation of the business. These matters generally include, among other things, matters with regard to employment and general business-related issues. The Company currently believes that the resolution of any of these pending matters will not have a material adverse effect on its financial position or liquidity, but an adverse decision in more than one of the matters could be material to its consolidated results of operations. The Company filed a complaint on July 14, 2015, against a group of former franchisees in California seeking injunctive relief and damages for: (1) Federal Trademark Infringement; (2) Federal Trademark Dilution; (3) Federal Unfair Competition; (4) Federal Trade Dress Dilution; (5) Trademark Infringement under California Business and Professions Code § 14200; (6) Trademark Dilution under California Business and Professions Code §14200; (7) Common Law Trademark Infringement; (8) Unfair Competition under California Business and Professions Code § 17200; (9) False Advertising; (10) Breach of Contract; (11) Breach of Implied Covenant of Good Faith and Fair Dealing; and (12) Intentional Interference with Contract. The claims stem from the former franchisees’ breaches of their franchise agreements, including the failure to pay franchise fees and their continued operation of five restaurants utilizing Famous Dave’s intellectual property without authorization. After two defendants in the case, Kurt Schneiter and M Mart 1, filed a demurrer to the Complaint, Famous Dave’s filed an Amended Complaint on October 9, 2015, reasserting the same claims. The case is captioned Famous Dave’s of America, Inc., v. SR El Centro FD, Inc., et al., Case No. BC589329, and is currently pending before the Honorable Elihu M. Berle in the Superior Court of Los Angeles. By court order, dated June 6, 2016, Famous Dave’s successfully obtained a preliminary injunction, enjoining the former franchisee defendants from using Famous Dave’s intellectual property, including its trademarks and restaurant system. The preliminary injunction is currently the subject of a pending interlocutory appeal which Famous Dave’s intends to oppose vigorously. The appeal has been fully briefed and an oral argument hearing took place on August 10, 2017. As of August 14, 2017, the Company has not been informed of the outcome of the oral argument hearing. On July 28, 2015, these franchisees (the “Plaintiffs”) filed a complaint against Famous Dave’s in the South Judicial District of the Superior Court of the County of Los Angeles. On March 10, 2016, Plaintiffs re-filed this Complaint as a First Amended Cross-Complaint Famous Dave’s of America, Inc. v. SR El Centro, Inc., et al., Superior Court of the State of California, County of Los Angeles, Central Division, Case No. BC589329 alleging that Famous Dave’s breached the Franchise Agreements for these restaurants by failing to provide certain marketing support and access to customer contact data, vendors, internet reporting and support to Plaintiffs, and failing to provide operations and preferred practices training to Plaintiffs’ designated representative. Plaintiffs further allege that such conduct by Famous Dave’s is a breach of the covenant of good faith and fair dealing. Plaintiffs also allege that Famous Dave’s aided and abetted John and Allan Gantes in breach of their fiduciary duty to Plaintiffs. Plaintiffs are seeking compensatory damages in amount not less than $20 million, punitive damages, costs and attorneys’ fees.

SUPPLEMENTAL CASH FLOWS INFORMA

SUPPLEMENTAL CASH FLOWS INFORMATION	6 Months Ended
	Jul. 02, 2017
Supplemental Cash Flow Information [Abstract]
Supplemental Cash Flow Information Disclosures [Text Block]	(16) Supplemental Cash Flow Information Six Months Ended July 2, July 3, (in thousands) 2017 2016 Cash paid for interest $ 336 $ 400 Cash paid (refunds received) for income taxes, net (288) 136 Non-cash investing and financing activities: Change in deferred taxes, recognized in additional paid-in capital $ 55 $ — Increase (decrease) in accrued property and equipment purchases (2) 31

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jul. 02, 2017
Subsequent Events [Abstract]
Subsequent Events Disclosure [Text Block]	(17) Subsequent Events The Company evaluated for the occurrence of subsequent events through the issuance date of the Company’s financial statements. No other recognized or non-recognized subsequent events occurred that require recognition or disclosure in the consolidated financial statements, except as noted below. Subsequent to the balance sheet date, the Company closed three restaurants in accordance with its restaurant refranchising and optimization plan.

BASIS OF PRESENTATION (Tables)

BASIS OF PRESENTATION (Tables)	6 Months Ended
	Jul. 02, 2017
Nature Of Business And Significant Accounting Policies [Abstract]
Schedule Of Effective Income Tax Rate Reconciliation [Table Text Block]	Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, 2017 2016 2017 2016 Effective tax rate 33.2 % (1.8) % 38.3 % 20.4 %

NET INCOME PER COMMON SHARE (Ta

NET INCOME PER COMMON SHARE (Tables)	6 Months Ended
	Jul. 02, 2017
Earnings Per Share [Abstract]
Schedule of Earnings Per Share Reconciliation [Table Text Block]	Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, (in thousands, except per share data) 2017 2016 2017 2016 Net (loss) income per share – basic: Net (loss) income from continuing operations, net of taxes $ (1,261) $ 113 $ (2,507) $ 262 Net income from discontinued operations, net of taxes — 27 — 708 Net (loss) income (1,261) 140 (2,507) 970 Weighted average shares outstanding 6,955 6,949 6,955 6,949 Net (loss) income from continuing operations per share – basic $ (0.18) $ 0.02 $ (0.36) $ 0.04 Net income from discontinued operations per share – basic — 0.00 — 0.10 Net (loss) income per share – basic $ (0.18) $ 0.02 $ (0.36) $ 0.14 Net (loss) income per share – diluted: Net (loss) income from continuing operations, net of taxes $ (1,261) $ 113 $ (2,507) $ 262 Net income from discontinued operations, net of taxes — 27 — 708 Net (loss) income (1,261) 140 (2,507) 970 Weighted average shares outstanding 6,955 6,949 6,955 6,949 Dilutive impact of stock equivalents outstanding — 9 — 9 Adjusted weighted average shares outstanding 6,955 6,958 6,955 6,958 Net (loss) income from continuing operations per share – diluted $ (0.18) $ 0.02 $ (0.36) $ 0.04 Net income from discontinued operations per share – diluted — 0.00 — 0.10 Net (loss) income per share – diluted $ (0.18) $ 0.02 $ (0.36) $ 0.14

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jul. 02, 2017
Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets [Table Text Block]	Remaining estimated Less Non- useful life Original Accumulated Net Book Current Current (in thousands) (years) Cost Impairment Amortization Value Portion (1) Portion Balance at July 2, 2017 Lease interest assets 22.6 $ 1,091 $ — $ (268) $ 823 $ (36) $ 787 Liquor licenses 1,760 — — 1,760 — 1,760 Total $ 2,851 $ — $ (268) $ 2,583 $ (36) $ 2,547 Remaining estimated Less Non- useful life Original Accumulated Net Book Current Current (in thousands) (years) Cost Impairment Amortization Value Portion (1) Portion Balance at January 1, 2017 Lease interest assets 23.1 $ 1,417 $ (326) $ (249) $ 842 $ (37) $ 805 Liquor licenses 1,810 (50) — 1,760 — 1,760 Total $ 3,227 $ (376) $ (249) $ 2,602 $ (37) $ 2,565 (1) The current portion is included in prepaid expenses and other current assets on the consolidated balance sheets. (2) Recorded in connection with the restaurant optimization. (3) Based upon a quantitative analysis of this intangible asset, the Company determined that the fair value of one liquor license was less than its carrying value.

LONG-TERM DEBT AND FINANCING 26

LONG-TERM DEBT AND FINANCING LEASE OBLIGATIONS (Tables)	6 Months Ended
	Jul. 02, 2017
Debt Disclosure [Abstract]
Schedule Of Debt [Table Text Block]	July 2, January 1, (in thousands) 2017 2017 First Note - Venture Bank - monthly installments of principal and interest until December 2, 2026 3,641 3,700 Second Note - Venture Bank - monthly payments of principal and interest until December 2, 2023 5,909 6,300 Less: deferred financing fees (239) (234) Less: current maturities (919) (917) Long-term debt net of current maturities $ 8,392 $ 8,849
Schedule Of Financing Lease Obligations [Table Text Block]	July 2, January 1, ( in thousands ) 2017 2017 Financing lease – Spirit Financial – monthly installments of $40 – effective interest rate of 8.81%, due in March 2019. $ 1,749 $ 2,757 Less: deferred financing fees (18) (23) Less: current maturities (353) (454) Long-term financing lease net of current maturities $ 1,378 $ 2,280

PREPAID EXPENSES AND OTHER CU27

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)	6 Months Ended
	Jul. 02, 2017
Deferred Costs, Capitalized, Prepaid, And Other Assets Disclosure [Abstract]
Prepaid Expenses and Other Current Assets [Table Text Block]	July 2, January 1, (in thousands) 2017 2017 Prepaid income taxes $ 3,661 $ 2,168 Prepaid insurance and other expenses 1,842 1,306 Other current assets 51 57 $ 5,554 $ 3,531

OTHER CURRENT LIABILITIES (Tabl

OTHER CURRENT LIABILITIES (Tables)	6 Months Ended
	Jul. 02, 2017
Accrued Liabilities, Current [Abstract]
Other Current Liabilities [Table Text Block]	July 2, January 1, (in thousands) 2017 2017 Gift cards payable $ 1,266 $ 1,448 Other liabilities 825 810 Lease reserves, current 800 330 Sales tax payable 368 454 Accrued real estate tax 235 79 Deferred franchise fees — 16 Accrued property and equipment purchases 1 3 $ 3,495 $ 3,140

OTHER LIABILITES (Tables)

OTHER LIABILITES (Tables)	6 Months Ended
	Jul. 02, 2017
Other Liabilities [Abstract]
Schedule Of Other Liabilities [Table Text Block]	July 2, January 1, (in thousands) 2017 2017 Deferred rent $ 7,176 $ 7,802 Other liabilities 152 358 Asset retirement obligations 119 119 Accrual for uncertain tax position 126 139 Long term lease reserve 764 145 Long term deferred compensation 119 142 $ 8,456 $ 8,705

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	6 Months Ended
	Jul. 02, 2017
Performance Shares, Stock Options, Other Forms Of Compensation And Common Share Repurchaces [Abstract]
Schedule of Stock-based Compensation Expense [Table Text Block]	Three Months Ended Six Months Ended July 2, July 3, July 2, July 3, (in thousands) 2017 2016 2017 2016 Stock options (1) $ 16 $ 121 $ 116 $ 53 Restricted stock 8 15 15 30 $ 24 $ 136 $ 131 $ 83 The three months ended July 2, 2017 includes the recapture of previously recorded stock-based compensation due to one of the Company’s former directors declining to stand for reelection to the Board. The six months ended July 3, 2016 includes the recapture of previously recorded stock-based compensation due to the departure of the Company’s former Chief Financial Officer.
Schedule Of Stock Options Activity [Table Text Block]	Weighted Average Remaining Number of Weighted Average Contractual (number of options in thousands) Options Exercise Price Life in Years Options outstanding at January 1, 2017 686 $ 9.15 5.7 Granted 55 4.29 Exercised — — Forfeited or expired (112) 12.34 Options outstanding at July 2, 2017 629 $ 8.16 Six Months Ended July 2, 2017 Fiscal 2016 Weighted-average fair value of options granted during the period $ 2.55 $ 1.97 Expected life (in years) 5.0 5.2 Expected stock volatility 60.47 % 39.98 % Risk-free interest rate 2.2 % 1.2 %

ASSET IMPAIRMENT AND ESTIMATE31

ASSET IMPAIRMENT AND ESTIMATED LEASE TERMINATION AND OTHER CLOSING COSTS (Tables)	6 Months Ended
	Jul. 02, 2017
Asset Impairment Charges [Abstract]
Asset Impairment, Estimated Lease Termination and Other Closing Costs [Table Text Block]	Three Months Ended Six Months Ended (dollars in thousands) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Restaurant Optimization Asset impairments, net $ 3,098 $ 868 $ 3,042 $ 868 Lease termination charges (1) 353 — 1,535 — Restaurant closure expenses 22 17 29 25 Software — 171 — 171 Asset impairment, estimated lease termination and other closing costs $ 3,473 $ 1,056 $ 4,606 $ 1,064 (1) Primarily related to Chicago-area refranchised restaurants, restaurants closed during the applicable time period and former Chicago field office. See Note 14 - Variable Interest Entities.

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jul. 02, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]	(in thousands) Level 1 Level 2 Level 3 Total Balance at July 2, 2017 Assets Property and Equipment, net $ — $ — $ 3,387 $ 3,387 Balance at January 1, 2017 Assets Assets Held for Sale $ — $ 1 $ — $ 1 Property and Equipment, net $ — $ — $ 1,742 $ 1,742

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	6 Months Ended
	Jul. 02, 2017
Discontinued Operations And Disposal Groups [Abstract]
Disposal Groups, Including Discontinued Operations [Table Text Block]	Three Months Ended Six Months Ended (in thousands) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Revenue $ — $ — $ — $ 2,365 Interest expense — — — 32 Income tax expense — 55 — 385 Income from discontinued operations — 15 — 1,042 Income from discontinued operations, net of income taxes — 27 — 708

SUPPLEMENTAL CASH FLOWS INFOR34

SUPPLEMENTAL CASH FLOWS INFORMATION (Tables)	6 Months Ended
	Jul. 02, 2017
Supplemental Cash Flow Information [Abstract]
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]	Six Months Ended July 2, July 3, (in thousands) 2017 2016 Cash paid for interest $ 336 $ 400 Cash paid (refunds received) for income taxes, net (288) 136 Non-cash investing and financing activities: Change in deferred taxes, recognized in additional paid-in capital $ 55 $ — Increase (decrease) in accrued property and equipment purchases (2) 31

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2017USD ($)staterestaurant	Jul. 03, 2016	Jul. 02, 2017USD ($)staterestaurant	Jul. 03, 2016	Jan. 01, 2017USD ($)
Franchisor Disclosure Line Items
Number Of Restaurants	167		167
Number of States in which Entity Operates | state	32		32
Effective Income Tax Rate, Continuing Operations	33.20%	(1.80%)	38.30%	20.40%
Deferred Tax Assets, Net, Noncurrent | $	$ 4,338		$ 4,338		$ 4,633
Franchised Units [Member]
Franchisor Disclosure Line Items
Number Of Restaurants	135		135
Committed Restaurants	61		61
Entity Operated Units [Member]
Franchisor Disclosure Line Items
Number Of Restaurants	32		32

NET INCOME PER COMMON SHARE (De

NET INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2017	Jul. 03, 2016	Jul. 02, 2017	Jul. 03, 2016
Earnings Per Share [Abstract]
Net income from continuing operations	$ (1,261)	$ 113	$ (2,507)	$ 262
Net income (loss) from discontinued operations, net of tax		27		708
Net income	$ (1,261)	$ 140	$ (2,507)	$ 970
Weighted average common shares outstanding basic	6,955	6,949	6,955	6,949
Dilutive impact of common stock equivalents outstanding		9		9
Weighted average common shares outstanding diluted	6,955	6,958	6,955	6,958
Income (loss) from continuing operations per basic share	$ (0.18)	$ 0.02	$ (0.36)	$ 0.04
Income loss from discontinued operations per basic share		0		0.10
Basic net income per common share	(0.18)	0.02	(0.36)	0.14
Income loss from continuing operations per diluted share	(0.18)	0.02	(0.36)	0.04
Income loss from discontinued operations per diluted share		0		0.10
Diluted net income per common share	$ (0.18)	$ 0.02	$ (0.36)	$ 0.14
Anti-dilutive Securities Excluded From Computation Of Earnings Per Share Amount			629	659

RESTRICTED CASH AND MARKETING37

RESTRICTED CASH AND MARKETING FUND (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2017	Jan. 01, 2017
Restricted Cash And Cash Equivalents Items [Line Items]
Restricted Cash And Cash Equivalents	$ 1,640	$ 1,714
Franchisee Marketing Fund Contribution Rate	1.00%
Public Relations and Marketing Development Fund [Member]
Restricted Cash And Cash Equivalents Items [Line Items]
Restricted Cash And Cash Equivalents	$ 1,100	946
Cash Restricted for Letters of Credit [Member]
Restricted Cash And Cash Equivalents Items [Line Items]
Restricted Cash And Cash Equivalents	$ 557	$ 768

ALLOWANCE FOR DOUBTFUL ACCOUN38

ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands	Jul. 02, 2017	Jan. 01, 2017
Accounts Receivable Net [Abstract]
Allowance for Doubtful Accounts Receivable, Current	$ 266	$ 270

INTANGIBLE ASSETS, NET (Details

INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 02, 2017	Jan. 01, 2017
Intangible Assets Disclosure [Abstract]
Intangible Assets, Gross	$ 2,851	$ 3,227
Impairment		(376)
Accumulated Amortization	(268)	(249)
Intangible assets, net	2,583	2,602
Less Current Portion	(36)	(37)
Intangible assets, noncurrent	2,547	$ 2,565
Future Amortization Expense Next Five Years	$ 36

INTANGIBLE ASSETS, NET (Lease I

INTANGIBLE ASSETS, NET (Lease Interest Assets) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 02, 2017	Jan. 01, 2017
Finite-Lived Intangible Assets [Line Items]
Intangible Assets, Gross	$ 2,851	$ 3,227
Impairment		(376)
Accumulated Amortization	(268)	(249)
Intangible assets, net	2,583	2,602
Less Current Portion	(36)	(37)
Intangible assets, noncurrent	$ 2,547	$ 2,565
Off Market Favorable Lease [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted average amortization period (in years)	22 years 7 months 6 days	23 years 1 month 6 days
Intangible Assets, Gross	$ 1,091	$ 1,417
Impairment		(326)
Accumulated Amortization	(268)	(249)
Intangible assets, net	823	842
Less Current Portion	(36)	(37)
Intangible assets, noncurrent	$ 787	$ 805

INTANGIBLE ASSETS, NET (Liquor

INTANGIBLE ASSETS, NET (Liquor Licenses) (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 01, 2017	Jul. 02, 2017
Indefinite-lived Intangible Assets [Line Items]
Intangible Assets, Gross	$ 3,227	$ 2,851
Impairment	(376)
Accumulated Amortization	(249)	(268)
Intangible assets, net	2,602	2,583
Less Current Portion	(37)	(36)
Intangible assets, noncurrent	2,565	2,547
Liquor Licenses [Member]
Indefinite-lived Intangible Assets [Line Items]
Intangible Assets, Gross	1,810	1,760
Impairment	(50)
Intangible assets, net	1,760	1,760
Intangible assets, noncurrent	$ 1,760	$ 1,760

LONG-TERM DEBT AND FINANCING 42

LONG-TERM DEBT AND FINANCING LEASE OBLIGATIONS (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2017	Jan. 01, 2017
Debt Instrument [Line Items]
Long-term financing lease net of current maturities	$ 1,378	$ 2,280
Long-term debt net of current maturities	$ 8,392	$ 8,849
Long-term Debt, Weighted Average Interest Rate	4.20%	4.00%
Spirit Financing Lease [Member]
Debt Instrument [Line Items]
Minimum monthly debt payment	$ 40
Financing Lease Obligations Total	1,749	$ 2,757
Less current maturities	(353)	(454)
Long-term financing lease net of current maturities	1,378	2,280
Less: deferred financing fees	$ (18)	(23)
Long-term Debt, Weighted Average Interest Rate	8.81%
Long-term Debt [Member]
Debt Instrument [Line Items]
Less: deferred financing fees	$ (239)	(234)
Less: current maturities	(919)	(917)
Long-term debt net of current maturities	8,392	8,849
Second Loan Agreement [Member] | Long-term Debt [Member]
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	5,909	6,300
First Loan Agreement [Member] | Long-term Debt [Member]
Debt Instrument [Line Items]
Debt Instrument Carrying Amount	$ 3,641	$ 3,700

PREPAID EXPENSES AND OTHER CU43

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Jul. 02, 2017	Jan. 01, 2017
Deferred Costs, Capitalized, Prepaid, And Other Assets Disclosure [Abstract]
Prepaid income taxes	$ 3,661	$ 2,168
Prepaid insurance and other	1,842	1,306
Other current assets	51	57
Prepaid expenses and other current assets	$ 5,554	$ 3,531

OTHER CURRENT LIABILITIES (Deta

OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	Jul. 02, 2017	Jan. 01, 2017
Accrued Liabilities, Current [Abstract]
Gift cards payable	$ 1,266	$ 1,448
Other liabilities	825	810
Lease reserves, current	800	330
Accrued real estate taxes	235	79
Sales tax payable	368	454
Deferred franchise fees		16
Accrued property and equipment purchases	1	3
Total other current liabilities	$ 3,495	$ 3,140

OTHER LIABILITIES (Details)

OTHER LIABILITIES (Details) - USD ($) $ in Thousands	Jul. 02, 2017	Jan. 01, 2017
Other Liabilities [Abstract]
Deferred rent	$ 7,176	$ 7,802
Other liabilities	152	358
Asset retirement obligations	119	119
Accrual for uncertain tax position	126	139
Long term lease reserve	764	145
Long term deferred compensation	119	142
Total other liabilities	$ 8,456	$ 8,705

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 02, 2017	Jul. 03, 2016	Jul. 02, 2017	Jul. 03, 2016	Jan. 01, 2017
Share-based Compensation Arrangement By Share-based Payment Award [Line Items]
Number of Shares Available for Grant	78,864		78,864
Allocated Share-based Compensation Expense	$ 24	$ 136	$ 131	$ 83
Options Outstanding Rollforward [Abstract]
Outstanding options at beginning of period (in shares)			686,000
Options granted			55,000
Options forfeited or expired (in shares)			(112,000)
Outstanding options at end of period (in shares)	629,000		629,000		686,000
Weighted Average Exercise Price
Outstanding Weighted Average Price at beginning of period			$ 9.15
Granted Weighted Average Exercise Price			4.29
Forfeited or Expired Weighted Average Exercise Price			12.34
Outstanding Weighted Average Price at end of period	$ 8.16		$ 8.16		$ 9.15
Weighted Average Remaining Contractual Life and Exercisable
Options Outstanding Weighted Average Remaining Contractual Term			5 years 2 months 12 days		5 years 8 months 12 days
Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Weighted Average Grant Date Fair Value			$ 2.55		$ 1.97
Fair Value Assumptions Expected Term			5 years		5 years 2 months 12 days
Expected stock volatility			60.47%		39.98%
Risk-free interest rate			2.20%		1.20%
Employee [Member]
Weighted Average Remaining Contractual Life and Exercisable
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Non-Employee [Member]
Weighted Average Remaining Contractual Life and Exercisable
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			2 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			5 years
Maximum [Member] | Employee [Member]
Weighted Average Remaining Contractual Life and Exercisable
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years
Minimum [Member] | Employee [Member]
Weighted Average Remaining Contractual Life and Exercisable
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			5 years
Stock Option [Member]
Share-based Compensation Arrangement By Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 16	121	$ 116	53
Restricted Stock [Member]
Share-based Compensation Arrangement By Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 8	$ 15	$ 15	$ 30

ASSET IMPAIRMENT, ESTIMATED LEA

ASSET IMPAIRMENT, ESTIMATED LEASE TERMINATION AND OTHER CLOSING COSTS (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2017USD ($)	Jul. 03, 2016USD ($)	Jul. 02, 2017USD ($)restaurant	Jul. 03, 2016USD ($)
Impaired Long-Lived Assets Held and Used [Line Items]
Restaurants Closed | restaurant			5
Asset impairment, estimated lease termination and other closing costs	$ 3,473	$ 1,056	$ 4,606	$ 1,064
Restaurant Assets [Member]
Impaired Long-Lived Assets Held and Used [Line Items]
Asset impairments, net	3,098	868	3,042	868
Lease Termination Charges [Member]
Impaired Long-Lived Assets Held and Used [Line Items]
Business exit costs	353		1,535
Restaurant Closure Expenses [Member]
Impaired Long-Lived Assets Held and Used [Line Items]
Business exit costs	$ 22	17	$ 29	25
Software [Member]
Impaired Long-Lived Assets Held and Used [Line Items]
Business exit costs		$ 171		$ 171

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Jul. 02, 2017	Jan. 01, 2017
Assets Fair Value Disclosure [Abstract]
Assets Held For Sale Long Lived Fair Value Disclosure		$ 1
Property and Equipment, Net Fair Value Disclosure	$ 3,387	1,742
FairValueInputsLevel2Member
Assets Fair Value Disclosure [Abstract]
Assets Held For Sale Long Lived Fair Value Disclosure		1
Fair Value Inputs Level 3 [Member]
Assets Fair Value Disclosure [Abstract]
Property and Equipment, Net Fair Value Disclosure	$ 3,387	$ 1,742

DISCONTINUED OPERATIONS (Detail

DISCONTINUED OPERATIONS (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jul. 03, 2016	Jul. 03, 2016
Discontinued Operations And Disposal Groups [Abstract]
Revenues		$ 2,365,000
Interest expense		32,000
Income tax expense	$ 55,000	385,000
Income from operations	15,000	1,042,000
Net income (loss) from discontinued operations, net of tax	$ 27,000	708,000
Proceeds from Divestiture of Businesses		1,150,000
Proceeds From Sale Of Inventory		315,000
Discontinued Operation Gain Loss From Disposal Of Discontinued Operation Before Income Tax		1,100,000
Discontinued Operation Provision For Loss Gain On Disposal Before Income Tax		$ 1,300,000

VARIABLE INTEREST ENTITY (Detai

VARIABLE INTEREST ENTITY (Details)	Jul. 02, 2017USD ($)
Kentucky Restaurants [Member]
Variable Interest Entity [Line Items]
Variable Interest Entity, Entity Maximum Loss, Exposure Amount	$ 229,000
Chicago Restaurants [Member]
Variable Interest Entity [Line Items]
Variable Interest Entity, Entity Maximum Loss, Exposure Amount	1,700,000
Variable Interest Entity, Nonconsolidated, Carrying Amount, Liabilities	$ 1,000,000

LITIGATION (Details)

LITIGATION (Details) $ in Millions	6 Months Ended
	Jul. 02, 2017USD ($)
Litigation [Abstract]
Loss Contingency, Damages Sought, Value	$ 20

SUPPLEMENTAL CASH FLOWS INFOR52

SUPPLEMENTAL CASH FLOWS INFORMATION (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2017	Jul. 03, 2016
Supplemental Cash Flow Information [Abstract]
Cash paid for interest	$ 336	$ 400
Income Taxes Paid, Net	(288)	136
Change in deferred taxes, recognized in additional paid-in capital	55
Increase (Decrease) in Accrued Property and Equipment Purchases	$ (2)	$ 31

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - restaurant	1 Months Ended	6 Months Ended
	Aug. 14, 2017	Jul. 02, 2017
Subsequent event line items
Restaurants Closed		5
Subsequent Event [Member]
Subsequent event line items
Restaurants Closed	3