Related Party Transactions
|12 Months Ended|
Dec. 31, 2021
|Related Party Transactions [Abstract]|
|Related Party Transactions||Related Party Transactions
The Company is affiliated with various entities through common control and ownership. The accompanying consolidated balance sheets reflect amounts related to periodic advances between the Company and these entities for working capital and other needs as due from related companies or due to related companies, as appropriate. The amounts due from related companies are not expected to be repaid within one year and accordingly, are classified as non-current assets in the accompanying consolidated balance sheets. These advances are unsecured and non-interest bearing.
There were no amounts due from or due to related companies as of December 31, 2021. As of December 31, 2020, there were approximately $74,000 included as due from related companies in the consolidated balance sheet.
For the year ended December 31, 2021, the Company received royalty revenue from franchisees related to a significant shareholder totaling approximately $0.3 million. For the Successor period from December 16, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to December 15, 2020, the Company received royalty revenue from franchisees related through common control and ownership totaling approximately $17,000 and $0.3 million, respectively.
The Company leases building space for its corporate office from an entity under common ownership with a significant shareholder. This lease had a 36-month term, effective January 1, 2020. For the year ended December 31, 2021, rent expense was approximately $0.2 million. For the Successor period from December 16, 2020 to December 31, 2020 and the Predecessor period from January 1, 2020 to December 15, 2020, rent expense was approximately $1,000 and $0.2 million, respectively. In January 2022, we exercised our right to terminate this North Palm Beach lease effective as of July 2022. Pursuant to an amended lease we entered into in February 2022, we also lease approximately 16,500 square feet (expanding to approximately 18,500 square feet in July 2022) in Fort Lauderdale, Florida, for a term expiring in 2032, with an option to renew. This building space for our new combined BurgerFi and Anthony’s corporate office is leased from an entity controlled by the Company's Executive Chairman.
The Company also leases building space for a restaurant located in Virginia from an entity (i) in which the Company's Executive Chairman of the Board has an indirect minority ownership interest, and (ii) which is managed by an entity in which the Company's Executive Chairman of the Board has an indirect ownership interest. This lease, entered into on October 21, 2020, is for a ten-year term effective on the earlier to occur of the date the tenant opened for business and 180 days from the date the landlord delivered possession of the premises to the tenant. Rent expense for the years ended December 31, 2021 and 2020 was $46,000 and $0, respectively.
In April 2021, the Company entered into an independent contractor agreement with a corporation (the “Consultant”) for which the Chief Operating Officer (the "Consultant Principal") of Lionheart Capital, LLC, an entity controlled by the Company’s Executive Chairman of the Board, serves as President. Pursuant to the terms of the agreement, the Consultant shall provide certain strategic advisory services to the Company in exchange for total annual cash compensation and expense reimbursements of $0.1 million, payable in twelve (12) equal monthly payments beginning in April 2021. The Consultant also received an additional $29,000 of cash compensation for services provided in April 2021. In addition, in July 2021, the Consultant Principal received an award of 50,000 restricted stock units, which shall vest in equal annual installments, subject to the Company achieving certain annual revenue targets starting in 2021, and in November 2021, the Consultant Principal received a $250,000 bonus in connection with the Company's Anthony's acquisition. For the year ended December 31, 2021, 10,000 of these units vested, resulting in stock compensation expense of $0.2 million, which has been recorded in connection with the vesting of these restricted stock units. Further, effective January 3, 2022, the Consultant Principal was granted 37,959 unrestricted shares of common stock of the Company.
In connection with the acquisition of Anthony's, the Company issued redeemable preferred stock and assumed certain liabilities, including the Delayed Draw Term Loan Facility, which was provided by a related party and a significant shareholder. The Delayed Draw Term Loan is a non-interest bearing loan which matures on June 15, 2024. Refer to Note 9 Redeemable Preferred Stock and Note 10 Debt.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef