Company: RRGB
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001628280-25-051046
Chunk: 19

Company: RED ROBIN GOURMET BURGERS INC
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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 damage amounts claimed in litigation against us may be unsupported, exaggerated, or unrelated to possible outcomes, and as such are not meaningful indicators of our potential liability or financial exposure. Accordingly, we review the adequacy of accruals and disclosures each quarter in consultation with legal counsel, and we assess the probability and range of possible losses associated with contingencies for potential accrual in the Condensed Consolidated Financial Statements. However, the ultimate resolution of litigated claims may differ from our current estimates.As of October 5, 2025, we had reserves of $6.7 million for loss contingencies included within Accrued liabilities and other on our Condensed Consolidated Balance Sheet. We increased our estimate of loss contingency liabilities by approximately $3.2 million in the third quarter of fiscal 2025 related to ongoing legal matters. In the normal course of business, there are various claims in process, matters in litigation, administrative proceedings, and other contingencies. These include employment related claims and class action lawsuits; claims from guests or team members alleging illness, injury, food quality, health, or operational concerns; and lease and other commercial disputes. While it is not possible to predict the outcome of these suits, legal proceedings, and claims with certainty, management is of the opinion that adequate provision for potential losses associated with these matters has been made in the financial statements and that the ultimate resolution of pending or threatened matters will not have a material adverse effect on our financial position and results of operations. However, a significant increase in the number of these claims, or one or more successful claims resulting in greater liabilities than we currently anticipate, could materially and adversely affect our business, financial condition, results of operations, and cash flows. We ultimately may be subject to greater or less than the accrued amount for this and other matters.As of October 5, 2025, we had non-cancellable purchase commitments primarily related to certain vendors who provide food and beverage and other supplies to our restaurants, for an aggregate of $147.6 million. We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded.The Company has a potential contingent lease liability for lease payments related to certain franchisees’ lease arrangements. The maximum amount of potential future payments under the potential contingent lease liability was $3.1 million and $3.8 million as of October 5, 2025 and December 29, 2024, respectively. The Company does not believe these arrangements have or are