Note 11 - Commitments and Contingencies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Text Block] |
Operating Leases The Company leases its corporate office space and the space for each of the company-owned or managed clinics in the portfolio. During the year ended December 31, 2016, the Company assumed 16 additional leases for clinic locations. These leases vary in length from 60 to 127 months and have monthly payments ranging from $1,917 to $7,498.
Total rent expense for the years ended December 31, 2016 and 2015 was $3,389,971 and $1,574,803, respectively.Future minimum annual lease payments are as follows:
In December, 2016, the Company ceased use of five undeveloped clinic locations from its corporate clinics segment and recognized a liability for lease exit costs incurred based on the remaining lease rental due, reduced by estimated sublease rental income that could be reasonably obtained for the properties. The Company classified all of the approximately $338,000 lease exit liability in other liabilities in the accompanying consolidated balance sheets as of December 31, 2016, and related expense in Loss on disposition or impairment in the accompanying consolidated statement of operations for the year ended December 31, 2016.
Litigation In the normal course of business, the Company is party to litigation from time to time. On
July 7, 2015 six franchisees who owned a total of 13 franchise licenses ("Claimants") filed a Demand for Arbitration against the Company alleging breach of contract, breach of implied covenant of good faith and fair dealing, wrongful termination, fraud, promissory fraud, negligent misrepresentation, and claims under or arising out of violations of Section 31300, 31301, 31201 and 31202 of the California Franchise Investment Law. The Company vigorously denied liability for all of Claimants' claims and asserted counterclaims against each Claimant for breach of contract, breach of guaranty, among other claims, and sought a declaratory judgment that termination was proper because Claimants failed to adhere to the development schedules in their respective franchise agreements. The Company, through its counterclaim, sought damages for each unopened license, in accordance with the terms of the parties’ franchise agreements. The parties entered into a settlement agreement dated December 12, 2016, which included, among other things, a mutual general release of claims. The arbitration was subsequently dismissed with prejudice, based on the parties' stipulation. |