Note 16. Related Party Transactions
On January 11, 2013, the Company, also
referred to as Licensee, entered into a Trademark License Agreement (the License Agreement) with Sardar
Biglari, Chairman and Chief Executive Officer of the Company (Licensor). The License Agreement was unanimously approved
by the Governance, Compensation and Nominating Committee of the Board of Directors of the Company.
Under the License Agreement, Licensor
granted to Licensee an exclusive license to use the name and mark Biglari (alone or in connection with other terms and/or designs)
(the Licensed Marks) in association with the provision of investment services, franchising services, financial services,
restaurant franchising (including business management assistance in the establishment and/or operating of restaurants), hospitality
services, hotel management services, insurance services, restaurant services, retail and retail related services, real estate services
and apparel (collectively, the Products and the Services) throughout the world. Upon (a) the expiration
of twenty years from the date of the License Agreement (subject to extension as provided in the License Agreement), (b) the death
of Licensor, (c) the termination of Licensors employment by Licensee for Cause (as defined in the License Agreement), or
(d) the Licensors resignation from his employment with Licensee absent an Involuntary Termination Event (as defined in the
License Agreement). The Licensed Marks for the Products and Services will transfer from Licensor to Licensee without any compensation
if Licensee is continuing to use the Licensed Marks in the ordinary course of its business. Otherwise, the rights will revert to
The license provided under the License
Agreement is royalty-free unless and until one of the following events occurs: (i) a Change of Control (as defined in the License
Agreement) of Licensee; (ii) the termination of Licensors employment by Licensee without Cause; or (iii) Licensors
resignation from his employment with Licensee due to an Involuntary Termination Event (each, a Triggering Event).
Upon the occurrence of a Triggering Event and for a specified period of no less than five years thereafter, Licensor will be entitled
to receive a royalty from Licensee equal to two and one-half percent of revenues received by Licensee, its subsidiaries and affiliates
from Products, Services and businesses associated with a Licensed Mark prior to or following the Triggering Event, as specifically
provided in the License Agreement.
Mr. Biglari, along with his affiliates,
and certain directors of the Company make investments in the Lion Fund (other than the amounts invested by the Company), which
are not subject to special profits, interest allocations, or incentive allocations. However, Mr. Biglari does not pay an incentive
allocation fee as a limited partner in the Lion Fund. As of December 19, 2012 and September 26, 2012, the total fair value of these
investments was approximately $2,629 and $2,506, respectively.