# Good Times Restaurants Inc.: Form 10-Q for the period ended Jun 27, 2023

- Company: [Good Times Restaurants Inc.](/companies/gtim.md) (CIK 825324)
- Form: 10-Q
- Filed: 2023-08-03
- Accepted by EDGAR: Aug 3, 2023, 16:10 ET
- Period: 2023-06-27
- Accession: 0001437749-23-021933
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/825324/000143774923021933/gtim20230627_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/825324/000143774923021933/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-27.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-03-29 to 2023-06-27 | $35.6m | us-gaap:Revenues |
| Revenue | 9 months, 2022-09-28 to 2023-06-27 | $103.8m | us-gaap:Revenues |
| Operating income | 3 months, 2023-03-29 to 2023-06-27 | $444.0k | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2022-09-28 to 2023-06-27 | $1.4m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2023-03-29 to 2023-06-27 | −$551.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2022-09-28 to 2023-06-27 | −$10.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-03-29 to 2023-06-27 | $842.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-03-29 to 2023-06-27 | $0.07 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2022-09-28 to 2023-06-27 | $0.95 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-03-29 to 2023-06-27 | $0.07 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2022-09-28 to 2023-06-27 | $0.96 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-03-29 to 2023-06-27 | 11,769,286 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2022-09-28 to 2023-06-27 | 11,910,491 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2022-09-28 to 2023-06-27 | $4.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2023-03-29 to 2023-06-27 | $1.6m | us-gaap:PaymentsToAcquireProductiveAssets |
| Capital expenditure | 9 months, 2022-09-28 to 2023-06-27 | $3.2m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months, 2022-09-28 to 2023-06-27 | $1.7m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-06-27 | $3.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-06-27 | $7.2m | us-gaap:AssetsCurrent |
| Total assets | at 2023-06-27 | $91.3m | us-gaap:Assets |
| Current liabilities | at 2023-06-27 | $13.6m | us-gaap:LiabilitiesCurrent |
| Shareholders' equity | at 2023-06-27 | $33.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 51,855 characters.

This Form 10-Q contains or incorporates by reference forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the disclosure of risk factors in the Company’s Form 10-K for the fiscal year ended September 27, 2022 and subsequent filings with the SEC. Also, documents subsequently filed by us with the SEC and incorporated herein by reference may contain forward-looking statements. We caution investors that any forward-looking statements made by us are not guarantees of future performance and actual results could differ materially from those in the forward-looking statements as a result of various factors, including but not limited to the following:

(I) The COVID-19 pandemic and the associated government response, change in consumer behavior, labor market effects and supply chain impacts significantly affected the results of operations and financial condition of our business. Though the effects of this specific pandemic have mostly subsided, the risk of similar government and consumer response to future pandemics or other public health concerns, and the risk of similar impacts within the labor markets and global supply chain, could cause significant disruption to our business.

(II) We compete with numerous well-established competitors who have substantially greater financial resources and longer operating histories than we do. Competitors have increasingly offered selected food items and combination meals, including hamburgers, at discounted prices, and continued discounting by competitors may adversely affect revenues and profitability of Company restaurants.

(III) We may be negatively impacted if we experience same store sales declines. Same store sales comparisons will be dependent, among other things, on the success of our advertising and promotion of new and existing menu items. No assurances can be given that such advertising and promotions will in fact be successful.

(IV) We may be negatively impacted if we are unable to pass on to customers through menu price increases the increased costs that we incur through inflation experienced in our input costs including both the cost of food and the cost of labor. Recent metrics have indicated that increased levels of price inflation are prevalent throughout the economy which have resulted in increases in commodity, labor and energy costs for both concepts as well as increased product substitutions, elevated freight costs, and increased variability in product quality. Further significant increases in inflation could affect the global and U.S. economies, which could have an adverse impact on our business and results of operations if we and our franchisees are not able to adjust prices sufficiently to offset the effect of cost increases without negatively impacting consumer demand.

We may also be negatively impacted by other factors common to the restaurant industry such as: changes in consumer tastes away from red meat and fried foods; increases in the cost of food, paper, labor, health care, workers’ compensation or energy; inadequate number of hourly paid employees; increased wages and salaries for hourly and salaried employees; and/or decreases in the availability of affordable capital resources. We caution the reader that such risk factors are not exhaustive, particularly with respect to future filings. For further discussion of our exposure to market risk, refer to Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 27, 2022.

### Overview.

Good Times Restaurant Inc., through its subsidiaries (collectively, the “Company” or “we”, “us” or “our”) operates and franchises/licenses full-service hamburger-oriented restaurants under the name Bad Daddy’s Burger Bar (Bad Daddy’s) and operates and franchises hamburger-oriented drive-through restaurants under the name Good Times Burgers & Frozen Custard (Good Times).

We are focused on targeted unit growth of the Bad Daddy’s concept while at the same time growing same store sales and improving the profitability of both the Bad Daddy’s and the Good Times concepts.

### Macro-Economic Factors and Operating Environment.

During the three quarters ended June 27, 2023, high rates of inflation have been seen globally which have also resulted in increases in commodity, labor and energy costs for both concepts. Further significant continued increases in inflation could affect the global and U.S. economies, which could have an adverse impact on our business and results of operations if we and our franchisees are not able to adjust prices sufficiently to offset the effect of cost increases without negatively impacting consumer demand.

The Company maintains deposits with certain banks in excess of the maximum insured limits by the FDIC. The significant interest rate increases by the Federal Reserve have caused recent bank failures. Although in certain of those cases, depositors have been protected from loss by government intervention, no assurances can be made in the case of any failure of a bank in which the Company has uninsured deposits, that the Company would be similarly protected against loss of such uninsured deposits.

Although we conduct all of our restaurant operations within the USA, worldwide product supply chains have been impacted by international conflicts. Specifically sunflower oil and wheat, which are fungible commodities, are used as ingredients in our raw materials and purchased by our suppliers, have significant supplies that typically outside of the USA. The lack of availability of supplies of such products may impact the availability and supplier pricing for products purchased by us for use in our business, which could result in higher food and packaging costs or reduced revenues.

### Growth Strategies and Outlook.

We believe there are significant opportunities to grow customer traffic and increase awareness of our brands. In 2019 we reduced our development profile as we sought to improve our financial position, and while we believe there are unit growth opportunities for both of our concepts, we continue to evaluate that in-line with the inflationary impact currently seen in the restaurant industry. We have been focused on organic growth of sales in our existing restaurants, but have also recently acquired certain franchisee restaurants and repurchased noncontrolling interests in certain partnerships where we are the controlling partner. We may opportunistically make similar acquisitions in the future. We anticipate the opening of one new restaurant in August 2023 in the greater Huntsville, Alabama market and are developing a pipeline for greater growth in 2024 and beyond.

### Restaurant locations.

As of June 27, 2023, we operated, franchised, or licensed a total of forty Bad Daddy’s restaurants and thirty-one Good Times restaurants. The following table presents the number of restaurants operating at the end of the fiscal quarters ended June 27, 2023 and June 28, 2022.

### Company-Owned/Co-Developed:

|  | Bad Daddy’s Burger Bar 2023 | 2022 | Good Times Burgers & Frozen Custard 2023 | 2022 | Total 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Alabama | 2 | 2 | - | - | 2 | 2 |
| Colorado | 11 | 12 | 23 | 23 | 34 | 35 |
| Georgia | 5 | 5 | - | - | 5 | 5 |
| North Carolina | 14 | 14 | - | - | 14 | 14 |
| Oklahoma | 1 | 1 | - | - | 1 | 1 |
| South Carolina | 4 | 4 | - | - | 4 | 4 |
| Tennessee | 2 | 2 | - | - | 2 | 2 |
| Total | 39 | 40 | 23 | 23 | 62 | 63 |

One company-owned Bad Daddy’s restaurant closed, due to a termination by the landlord, for redevelopment in March 2023.

### Franchise/License:

|  | Bad Daddy’s Burger Bar 2023 | 2022 | Good Times Burgers & Frozen Custard 2023 | 2022 | Total 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Colorado | - | - | 6 | 6 | 6 | 6 |
| North Carolina | 1 | 1 | - | - | 1 | 1 |
| Wyoming | - | - | 2 | 2 | 2 | 2 |
| Total | 1 | 1 | 8 | 8 | 9 | 9 |

### Non-Traditional\*

|  | Bad Daddy’s Burger Bar 2023 | 2022 | Good Times Burgers & Frozen Custard 2023 | 2022 | Total 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Colorado | - | 1 | - | - | - | 1 |
| Total | - | 1 | - | - | - | 1 |

**\*** The non-traditional Bad Daddy’s Burger Bar location, where we operated the kitchen under our Bad Daddy’s brand for a local brewery’s taproom, closed in 2022.

### Results of Operations

### Fiscal quarter ended June 27, 2023 (13 weeks) compared to fiscal quarter ended June 28, 2022 (13 weeks):

***Net Revenues.*** Net revenues for the fiscal quarter ended June 27, 2023 decreased $877,000 or 2.4% to 35,620,000 from $36,497,000 for the fiscal quarter ended June 28, 2022. Bad Daddy’s concept revenues decreased $1,070,000 while our Good Times concept revenues increased $193,000.

Bad Daddy’s restaurant sales decreased $1,087,000 to $26,085,000 for the fiscal quarter ended June 27, 2023 from $27,172,000 for the fiscal quarter ended June 28, 2022. Sales were negatively affected by the closure of the Cherry Creek location and the temporary closure one restaurant for remodeling. Sales were also affected by reduced customer traffic, particularly in the Atlanta market, partially offset by menu price increases. The average menu price increase for the fiscal quarter ended June 27, 2023 over the same prior-year quarter was approximately 4.3%.

Good Times restaurant sales increased $198,000 to $9,291,000 for the fiscal quarter ended June 27, 2023 from $9,093,000 for the fiscal quarter ended June 28, 2022. The average menu price increase for the fiscal quarter ended June 27, 2023 over the same prior-year quarter was approximately 10.5%.

Franchise revenues increased $12,000 to $244,000 in the fiscal quarter ended June 27, 2023 compared to $232,000 in the fiscal quarter ended June 28, 2022. This increase is due primarily to the additional royalties generated from higher restaurant level sales at our franchised and licensed units.

#### Same Store Sales

Sales store sales is a metric used in evaluating the performance of established restaurants and is a commonly used metric in the restaurant industry. Same store sales for our brands are calculated using all company-owned units open for at least eighteen full fiscal months and use the comparable operating weeks from the prior year to the current year quarter’s operating weeks. The calculation of same store sales for Bad Daddy’s excludes the results of one restaurant for the April fiscal month due to that restaurant’s extended remodel closure.

Bad Daddy’s same store restaurant sales decreased 1.4% during the fiscal quarter ended June 27, 2023 compared to the same thirteen-week period ended June 28, 2022, primarily driven by weaker traffic, particularly in the Atlanta market, partially offset by menu price increases. There were thirty-nine restaurants included in the same store sales base at the end of the current quarter.

Good Times same store restaurant sales increased 2.1% during the fiscal quarter ended June 27, 2023 compared to the same thirteen-week period ended June 28, 2022, primarily due to menu price increases, offset by lower traffic associated with more precipitation and cooler temperatures in the Denver metro area compared to the prior-year quarter. There were twenty-three restaurants included in the same store sales base at the end of the current quarter.

### Restaurant Operating Costs

***Food and Packaging Costs.*** Food and packaging costs for the fiscal quarter ended June 27, 2023 decreased $844,000 to $10,923,000 (30.9% of restaurant sales) from $11,767,000 (32.4% of restaurant sales) for the fiscal quarter ended June 28, 2022.

Bad Daddy’s food and packaging costs were $8,106,000 (31.1% of restaurant sales) for the fiscal quarter ended June 27, 2023, down from $8,832,000 (32.5% of restaurant sales) for the fiscal quarter ended June 28, 2022. This decrease is primarily attributable to a combination of lower restaurant sales during the current fiscal quarter versus prior fiscal quarter to lower purchase prices for chicken, oil-based products, and other food commodities.

Good Times food and packaging costs were $2,817,000 (30.3% of restaurant sales) for the fiscal quarter ended June 27, 2023, down from $2,935,000 (32.3% of restaurant sales) for the fiscal quarter ended June 28, 2022. This decrease is primarily attributable to the higher menu prices and reduced purchase prices across most of our commodity basket.

***Payroll and Other Employee Benefit Costs.*** Payroll and other employee benefit costs for the fiscal quarter ended June 27, 2023 decreased $355,000 to $11,940,000 (33.8% of restaurant sales) from $12,295,000 (33.9% of restaurant sales) for the fiscal quarter ended June 28, 2022.

Bad Daddy’s payroll and other employee benefit costs were $9,054,000 (34.7% of restaurant sales) for the fiscal quarter ended June 27, 2023 down from $9,296,000 (34.2% of restaurant sales) for the fiscal quarter ended June 28, 2022. The $242,000 decrease is primarily attributable to lower restaurant sales during the current quarter compared to the same quarter in the prior year partially offset by slightly higher average pay rates. As a percent of sales, payroll and employee benefits costs increased by 0.5% primarily attributable to higher average wage rates paid to attract qualified employees.

Good Times payroll and other employee benefit costs were $2,886,000 (31.1% of restaurant sales) in the fiscal quarter ended June 27, 2023, down from $2,999,000 (33.0% of restaurant sales) in the same prior-year period. The decrease as is due primarily to increased labor productivity as measured in sales per labor hour.

***Occupancy Costs.*** Occupancy costs for the fiscal quarter ended June 27, 2023 increased $49,000 to $2,432,000 (6.9% of restaurant sales) from $2,383,000 (6.6% of restaurant sales) for the fiscal quarter ended June 28, 2022.

Bad Daddy’s occupancy costs were $1,700,000 (6.5% of restaurant sales) for the fiscal quarter ended June 27, 2023, up from $1,684,000 (6.2% of restaurant sales) for the fiscal quarter ended June 28, 2022.

Good Times occupancy costs were $732,000 (7.9% of restaurant sales) in the fiscal quarter ended June 27, 2023, up from $699,000 (7.7% of restaurant sales) in the fiscal quarter ended June 28, 2022. The increase was primarily attributable to increased property taxes and insurance costs.

***Other Operating Costs.*** Other operating costs for the fiscal quarter ended June 27, 2023, increased $58,000 to $4,811,000 (13.6% of restaurant sales) from $4,753,000 (13.1% of restaurant sales) for the fiscal quarter ended June 28, 2022.

Bad Daddy’s other operating costs were $3,750,000 (14.4% of restaurant sales) for the fiscal quarter ended June 27, 2023 up from $3,742,000 (13.8% of restaurant sales) for the fiscal quarter ended June 28, 2022. The increase as a percent of sales was primarily attributable to a higher mix of delivery and other off-premises sales.

Good Times other operating costs were $1,061,000 (11.4% of restaurant sales) in the fiscal quarter ended June 27, 2023, up from $1,011,000 (11.1% of restaurant sales) in the fiscal quarter ended June 28, 2022. The increase was primarily attributable to increased overall sales and increased delivery and off-premises sales.

***New Store Preopening Costs.*** In the fiscal quarter ended June 27, 2023, preopening costs were $80,000 compared to no preopening costs for the fiscal quarter ended June 28, 2022. These costs primarily relate to training costs incurred as part of our new Bad Daddy’s location in Madison, Alabama and re-training costs incurred as part of our closure and remodel of our Greenville, SC Bad Daddy’s location.

***Depreciation and Amortization Costs.*** Depreciation and amortization costs for the fiscal quarter ended June 27, 2023, decreased $74,000 to $919,000 from $993,000 in the fiscal quarter ended June 28, 2022. These decreases at both concepts are due to assets performing past their estimated usable lives and the prior-year impairment of assets, partially offset by new asset additions in existing restaurants.

Bad Daddy’s depreciation and amortization costs for the fiscal quarter ended June 27, 2023 decreased $78,000 to $768,000 from $846,000 in the fiscal quarter ended June 28, 2022.

Good Times depreciation and amortization costs for the fiscal quarter ended June 27, 2023 increased $4,000 to $151,000 from $147,000 in the fiscal quarter ended June 28, 2022.

***General and Administrative Costs.*** General and administrative costs for the fiscal quarter ended June 27, 2023, decreased $19,000 to $2,365,000 (6.6% of total revenues) from $2,384,000 (6.5% of total revenue) for the fiscal quarter ended June 28, 2022.

This decrease in general and administrative expenses in the fiscal quarter ended June 27, 2023 is primarily attributable to:

- Increase in costs associated with multi-unit supervisory roles of $172,000
- Increase in administrative, accounting, and technology costs of $116,000
- Increase attributable to underwriting gains/losses on the company’s health plan of $15,000
- Decrease in recruiting and training related costs of $96,000
- Decrease in home office payroll and benefits costs of $94,000
- Decrease in professional services of $62,000
- Decrease in insurance related costs $53,000
- Decrease in stock compensation costs of $45,000
- Decrease in general travel-related costs of $24,000
- Net increase in other costs of $57,000

***Advertising Costs.*** Advertising costs for the fiscal quarter ended June 27, 2023, decreased to $751,000 (2.1% of total revenue) from $807,000 (2.2% of total revenue) for the fiscal quarter ended June 28, 2023.

Bad Daddy’s advertising costs were $384,000 (1.5% of restaurant sales) in the fiscal quarter ended June 27, 2023 compared to $448,000 (1.6% of total revenue) for the fiscal quarter ended June 28, 2022. The decrease is primarily due to lesser recognition of commissions earned by third parties on gift cards sold through large-box retailers. Bad Daddy’s advertising costs consist primarily of a combination of menus and other point of purchase materials, digital advertising, and commissions incurred for placement of gift parties at third party retailers, as well as local store marketing efforts.

Good Times advertising costs were $367,000 (3.9% of restaurant sales) in the fiscal quarter ended June 27, 2023 compared to $359,000 (3.9% of total revenue) in the fiscal quarter ended June 28, 2022.

Good Times advertising costs consist primarily of radio advertising, social media, and on-site and point-of-purchase printing costs. Advertising costs are presented gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.

***Gain on Restaurant Asset Sales and Lease Termination.*** The gain on restaurant asset sales and lease termination for the fiscal quarter ended June 27, 2023 was $10,000, compared to $9,000 for the fiscal quarter ended June 28, 2022.

***Impairment of Long-Lived Assets Costs.*** The costs associated with impairments for the fiscal quarter ended June 27, 2023 was $965,000, which primarily consists of assets in one Atlanta-area restaurant, compared to $303,000 for the fiscal quarter ended June 28, 2022.

***Litigation Contingency Costs.*** There were no litigation contingency costs in either of the fiscal quarters ended June 27, 2023 or June 28, 2022.

***Income from Operations.*** Income from operations was $444,000 in the fiscal quarter ended June 27, 2023 compared to income from operations of $821,000 in the fiscal quarter ended June 28, 2022.

The change in the income from operations for the fiscal quarter ended June 27, 2023 is due primarily due to matters discussed in the “Net Revenues,” “Restaurant Operating Costs,” “General and Administrative Costs”, “Advertising Costs”, “Gain on Restaurant Sales and Lease Termination”, “Impairment of Long-Lived Assets Costs”, and “Litigation Contingency Costs” sections above.

***Interest Expense.*** Interest expense was $18,000 during the fiscal quarter ended June 27, 2023, primarily related to the amortization of loan initiation fees, compared with $12,000 during the fiscal quarter ended June 28, 2022.

***Provision for Income Taxes.*** Provision for income taxes was a $551,000 benefit for the fiscal quarter ended June 27, 2023, compared to $1,000 provision for income taxes for the fiscal quarter ended June 28, 2022. This most significant driver of this provision was related to changes in the projections of full-year net income and available tax credits.

***Net Income.*** Net income was $977,000 for the fiscal quarter ended June 27, 2023 compared to net income of $138,000 in the fiscal quarter ended June 28, 2022.

The change from the fiscal quarter ended June 27, 2023 to the fiscal quarter ended June 28, 2022 was primarily attributable to the matters discussed in the relevant sections above.

***Income Attributable to Non-Controlling Interests.*** The non-controlling interest represents the limited partners’ or members’ share of income in the Good Times and Bad Daddy’s restaurants during the periods of time non-controlling partners owned interests in these restaurants.

For the fiscal quarter ended June 27, 2023, the income attributable to non-controlling interests was $135,000 compared to $339,000 for the fiscal quarter ended June 28, 2022.

Of the quarter’s income attributable to non-controlling interests, none is attributable to Bad Daddy’s joint-venture restaurants, compared to $183,000 in the same prior year period. This decrease is due to the Company’s purchase of all the Bad Daddy’s non-controlling membership interests during the fiscal quarter ended March 28, 2023, as described in Note 15 to the unaudited, consolidated financial statements included in this report.

Of the current fiscal quarter’s income, $135,000 is attributable to the Good Times joint-venture restaurants, compared to $155,000 in the same prior year period. This decrease is primarily due to reduced restaurant level profitability in the current fiscal quarter at the restaurants involved in the joint-venture partnership.

### Fiscal three quarters ended June 27, 2023 (39 weeks) compared to fiscal three quarters ended June 28, 2022 (39 weeks):

***Net Revenues.*** Net revenues for the three quarters ended June 27, 2023 increased $789,000, or 0.8%, to $103,799,000 from $103,010,000 for the three quarters ended June 28, 2022. Bad Daddy’s concept revenues increased $368,000 while our Good Times concept revenues increased $421,000.

Bad Daddy’s restaurant sales increased $382,000 to $77,592,000 for the three quarters ended June 27, 2023 from $77,210,000 for the three quarters ended June 28, 2022. Sales were positively impacted by increases in sales primarily due to higher average menu prices as well as the purchase of a previously franchised Bad Daddy’s location that occurred in March 2022. The average menu price increase for the three quarters ended June 27, 2023 over the same prior-year quarter was approximately 4.4%.

Good Times restaurant sales increased $436,000 to $25,531,000 for the three quarters ended June 27, 2023 from $25,095,000 for the three quarters ended June 28, 2022, primarily due to increased menu prices. The average menu price increase for the three quarters ended June 27, 2023 over the same prior-year quarter was approximately 9.6%.

Franchise revenues decreased $29,000 to $676,000 in the three quarters ended June 27, 2023 compared to $705,000 in the three quarters ended June 28, 2022. This decrease is primarily due to the acquisition, during the second fiscal quarter of 2022, by the Company of one Bad Daddy’s restaurant previously owned by a franchisee, partially offset by increased royalties arising from higher restaurant sales at franchised and licensed locations.

#### Same Store Sales

Sales store sales is a metric used in evaluating the performance of established restaurants and is a commonly used metric in the restaurant industry. Same store sales for our brands are calculated using all company-owned units open for at least eighteen full fiscal months and use the comparable operating weeks from the prior year-to-date period to the current year-to-date period’s operating weeks. The calculation of same store sales for Bad Daddy’s excludes the results of one restaurant for the March and April fiscal months due to that restaurant’s extended remodel closure.

Bad Daddy’s same store restaurant sales increased 1.8% during the three quarters ended June 27, 2023 compared to the same three quarters ended June 28, 2022, primarily driven by strong off premise sales and menu price increases, partially offset by traffic declines, particularly in the Atlanta market, during the third fiscal quarter. There were thirty-nine restaurants included in the same store sales base at the end of the current quarter.

Good Times same store restaurant sales increased 4.1% during the three quarters ended June 27, 2023 compared to the same three quarters period ended June 28, 2022, primarily due to menu price increases, slightly offset by lower traffic. There were twenty-three restaurants included in the same store sales base at the end of the current quarter.

### Restaurant Operating Costs

***Food and Packaging Costs.*** Food and packaging costs for the three quarters ended June 27, 2023 decreased $265,000 to $32,185,000 (31.2% of restaurant sales) from $32,450,000 (31.7% of restaurant sales) for the three quarters ended June 28, 2022.

Bad Daddy’s food and packaging costs were $24,131,000 (31.1% of restaurant sales) for the three quarters ended June 27, 2023, down from $24,615,000 (31.9% of restaurant sales) for the three quarters ended June 28, 2022. This decrease is primarily attributable to lower purchase prices on food and paper goods, and menu price increases, offset by decreased traffic in the third fiscal quarter.

Good Times food and packaging costs were $8,054,000 (31.5% of restaurant sales) for the three quarters ended June 27, 2023, up from $7,835,000 (31.2% of restaurant sales) for the three quarters ended June 28, 2022. This increase is primarily attributable to the impact of higher sales, and as a percent of sales the increase is primarily attributable to higher year-to-date purchase prices on food and paper goods partially offset by the impact of an 9.6% increase in menu pricing.

***Payroll and Other Employee Benefit Costs.*** Payroll and other employee benefit costs for the three quarters ended June 27, 2023 increased $450,000 to $35,477,000 (34.4% of restaurant sales) from $35,027,000 (34.2% of restaurant sales) for the three quarters ended June 28, 2022.

Bad Daddy’s payroll and other employee benefit costs were $26,951,000 (34.7% of restaurant sales) for the three quarters ended June 27, 2023 up from $26,450,000 (34.3% of restaurant sales) for the three quarters ended June 28, 2022. The $501,000 increase is primarily attributable to higher restaurant sales during the current quarter versus the same quarter in the prior year, as well as slightly higher average pay rates. As a percent of sales, payroll and employee benefits costs increased by 0.4% primarily attributable to higher average wage rates paid to attract qualified employees.

Good Times payroll and other employee benefit costs were $8,526,000 (33.4% of restaurant sales) in the three quarters ended June 27, 2023, down from $8,577,000 (34.2% of restaurant sales) in the same prior-year period. The $51,000 decrease was attributable to improved labor productivity.

***Occupancy Costs.*** Occupancy costs for the three quarters ended June 27, 2023 increased $230,000 to $7,318,000 (7.1% of restaurant sales) from $7,088,000 (6.9% of restaurant sales) for the three quarters ended June 28, 2022.

Bad Daddy’s occupancy costs were $5,124,000 (6.6% of restaurant sales) for the three quarters ended June 27, 2023, up from $5,011,000 (6.5% of restaurant sales) for the three quarters ended June 28, 2022. The increase was primarily attributable to additional lease costs associated with the purchase of our Bad Daddy’s Franchisee in the second quarter of fiscal 2022.

Good Times occupancy costs were $2,194,000 (8.6% of restaurant sales) in the three quarters ended June 27, 2023, up from $2,077,000 (8.3% of restaurant sales) in the three quarters ended June 28, 2022. The increase was primarily attributable to increased property taxes and insurance costs.

***Other Operating Costs.*** Other operating costs for the three quarters ended June 27, 2023, increased $571,000 to $14,129,000 (13.7% of restaurant sales) from $13,558,000 (13.3% of restaurant sales) for the three quarters ended June 28, 2022.

Bad Daddy’s other operating costs were $11,084,000 (14.3% of restaurant sales) for the three quarters ended June 27, 2023 up from $10,696,000 (13.9% of restaurant sales) for the three quarters ended June 28, 2022. The $338,000 increase and the increase as a percentage of sales was attributable to higher overall sales, increased third party delivery fees, increased utility costs, and a general increase in restaurant supplies.

Good Times other operating costs were $3,045,000 (11.9% of restaurant sales) in the three quarters ended June 27, 2023, up from $2,862,000 (11.4% of restaurant sales) in the three quarters ended June 28, 2022. The increase was primarily attributable to increased sales and general price inflation in supplies costs.

***New Store Preopening Costs.*** New store preopening costs were $110,000 for the three quarters ended June 27, 2023, primarily associated with training costs associated with our new Bad Daddy’s in Madison, Alabama and re-training costs in connection with the remodel of our Greenville, SC Bad Daddy’s, compared to $50,000 for the three quarters ended June 28, 2022.

***Depreciation and Amortization Costs.*** Depreciation and amortization costs for the three quarters ended June 27, 2023, decreased $250,000 to 2,740,000 from $2,990,000 in the three quarters ended June 28, 2022.

Bad Daddy’s depreciation and amortization costs for the three quarters ended June 27, 2023 decreased $161,000 to $2,303,000 from $2,464,000 in the three quarters ended June 28, 2022.

Good Times depreciation and amortization costs for the three quarters ended June 27, 2023 decreased $89,000 to $437,000 from $526,000 in the three quarters ended June 28, 2022.

***General and Administrative Costs.*** General and administrative costs for the three quarters ended June 27, 2023, decreased $621,000 to $7,040,000 (6.8% of total revenues) from $7,661,000 (7.4% of total revenue) for the three quarters ended June 28, 2022.

This decrease in general and administrative expenses in the three quarters ended June 27, 2023 is primarily attributable to:

- Increase in administrative, accounting, and technology costs of $362,000
- Increase in costs associated with multi-unit supervisory roles of $258,000
- Decrease in professional services of $759,000
- Decrease in insurance related costs $163,000
- Decrease in stock compensation costs of $103,000
- Decrease attributable to underwriting gains/losses on the company’s health plan of $97,000
- Decrease in recruiting and training related costs of $55,000
- Decrease in general office expenses of $21,000
- Decrease in general travel-related costs of $15,000
- Net decrease in other costs of $28,000

***Advertising Costs.*** Advertising costs for the three quarters ended June 27, 2023, increased to $2,423,000 (2.3% of sales) from $2,260,000 (2.2% of total revenue) for the three quarters ended June 28, 2023.

Bad Daddy’s advertising costs were $1,414,000 (1.8% of restaurant sales) in the three quarters ended June 27, 2023 compared to $1,228,000 (1.6% of total revenue) for the three quarters ended June 28, 2022. The increase is primarily due to recognition of commission earned by third parties on gift cards sold through large-box retailers. Bad Daddy’s advertising costs consist primarily of menu development, printing costs, local store marketing and social media.

Good Times advertising costs were $1,009,000 (3.9% of restaurant sales) in the three quarters ended June 27, 2023 compared to $1,032,000 (4.0% of total revenue) in the three quarters ended June 28, 2022.

Good Times advertising costs consist primarily of radio advertising, social media, and on-site and point-of-purchase printing costs. Advertising costs are presented gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.

***Gain on Restaurant Asset Sales and Lease Termination.*** The gain on restaurant asset sales and lease termination for the three quarters ended June 27, 2023 was $32,000, compared to $666,000 for the three quarters ended June 28, 2022. The prior-year gain included the gain on termination of a lease associated with a Good Times restaurant.

***Impairment of Long-Lived Assets Costs.*** The costs associated with impairments for the three quarters ended June 27, 2023 was $1,041,000, which primarily consists of the impairment of one Bad Daddy’s restaurant, compared to $2,056,000 for the three quarters ended June 28, 2022.

***Litigation Contingency Costs.*** There were no litigation contingency costs in the three quarters ended June 27, 2023, compared to $332,000 for the three quarters ended June 28, 2022.

***Income from Operations.*** Income from operations was $1,368,000 in the three quarters ended June 27, 2023 compared to income from operations of $188,000 in the three quarters ended June 28, 2022.

The change in the income from operations for the three quarters ended June 27, 2023 is due primarily due to matters discussed in the “Net Revenues,” “Restaurant Operating Costs,” “General and Administrative Costs”, “Advertising Costs”, “Gain on Restaurant Sales and Lease Termination”, “Impairment of Long-Lived Assets Costs”, and “Litigation Contingency Costs” sections above.

***Interest Expense.*** Interest expense was $56,000 during the three quarters ended June 27, 2023, primarily related to the amortization of loan initiation fees, compared with $41,000 during the three quarters ended June 28, 2022.

***Provision for Income Taxes.*** Provision for income taxes was a $10,503,000 benefit for the three quarters ended June 27, 2023, compared to $9,000 provision for income taxes for the three quarters ended June 28, 2022. This most significant driver of this provision was the release of the valuation allowance during previously assessed on the deferred tax assets.

***Net Income.*** Net income was $11,815,000 for the three quarters ended June 27, 2023 compared to net income of $147,000 in the three quarters ended June 28, 2022.

The change from the three quarters ended June 27, 2023 to the three quarters ended June 28, 2022 was primarily attributable to the matters discussed in the relevant sections above.

***Income Attributable to Non-Controlling Interests.*** The non-controlling interest represents the limited partners’ or members’ share of income in the Good Times and Bad Daddy’s joint-venture restaurants.

For the three quarters ended June 27, 2023, the income attributable to non-controlling interests was $479,000 compared to $1,489,000 for the three quarters ended June 28, 2022.

Of the three quarters’ income attributable to non-controlling interests, $219,000 is attributable to Bad Daddy’s joint-venture restaurants, compared to $1,024,000 in the same prior year period. This $805,000 decrease is primarily due to a one-time special allocation to the non-controlling partners in these partnerships of approximately $516,000 in the fiscal quarter ended December 28, 2021 related to a rebate of payroll costs, and to the company’s purchase of all the Bad Daddy’s non-controlling membership interests during the fiscal quarter ended March 28, 2023, as described in Note 15 to the unaudited, consolidated financial statements included in this report. Of the current quarter’s income, $260,000 is attributable to the Good Times joint-venture restaurants, compared to $464,000 in the same prior year period at the restaurants involved in the joint-venture partnership. This $204,000 decrease is primarily due to decreased restaurant level profitability in the current fiscal quarter.

### Adjusted EBITDA

EBITDA is defined as net income (loss) attributable to common shareholders before interest, income taxes and depreciation and amortization.

Adjusted EBITDA is defined as EBITDA plus non-cash stock-based compensation expense, preopening expense, non-recurring acquisition costs, GAAP rent in excess of cash rent, and non-cash disposal of assets. Adjusted EBITDA is intended as a supplemental measure of our performance that is not required by or presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results. Our management uses EBITDA and Adjusted EBITDA (i) as a factor in evaluating management's performance when determining incentive compensation and (ii) to evaluate the effectiveness of our business strategies.

We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other fast casual restaurants, which may present similar non-GAAP financial measures to investors. In addition, you should be aware when evaluating EBITDA and Adjusted EBITDA that in the future we may incur expenses similar to those excluded when calculating these measures. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies do not calculate Adjusted EBITDA in the same fashion.

Our management does not consider EBITDA or Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of EBITDA and Adjusted EBITDA is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. Some of these limitations are:

- Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;
- stock based compensation expense is and will remain a key element of our overall long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing performance for a particular period;
- Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
- Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only as a supplemental measure. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.

The following table reconciles net loss/income to EBITDA and Adjusted EBITDA *(in thousands)* for the fiscal quarter ended June 27, 2023:

| Adjusted EBITDA: | Quarter Ended (13 Weeks) June 27, 2023 | June 28, 2022 | Year-to-Date (39 Weeks) June 27, 2023 | June 28, 2022 |
| --- | ---: | ---: | ---: | ---: |
| **Net Income (loss) attributable common shareholders, as reported** | $842 | $469 | $11,336 | $(1,351) |
| Depreciation and amortization1 | 924 | 951 | 2,691 | 2,933 |
| Interest expense, net | 18 | 12 | 56 | 41 |
| Provision for income taxes | (551) | 1 | (10,503) | 9 |
| EBITDA | 1,233 | 1,433 | 3,580 | 1,632 |
| Preopening expense | 80 | - | 110 | 50 |
| Non-cash stock-based compensation | 15 | 60 | 104 | 208 |
| Asset Impairment | 965 | 303 | 1,041 | 2,056 |
| GAAP rent-cash rent difference1 | (135) | (103) | (450) | (286) |
| Gain on restaurant asset sales and lease termination2 | (10) | (9) | (32) | (528) |
| One-time special allocation to Bad Daddy’s partnerships3 | - | - | - | 516 |
| Litigation contingencies | - | - | - | 332 |
| Adjusted EBITDA | $2,148 | 1,684 | $4,353 | $3,980 |

1 Depreciation and amortization expense and GAAP rent-cash rent difference together have been reduced by amounts attributable to non-controlling interests of $17,000 and $63,000 for the quarters ended June 27, 2023 and June 28, 2022, respectively. Depreciation and amortization expense and GAAP rent-cash rent difference have been reduced by amounts attributable to non-controlling interests of $107,000 and $133,000 for the three quarters ended March 28, 2023 and March 29, 2022, respectively.

2 Gain (Loss) on restaurant asset sales and lease termination had no impact from amounts attributable to non-controlling interests in the three quarters ended June 27, 2023 and June 28, 2022. Gain (loss) on restaurant asset sales and lease termination had no impact from amounts attributable to non-controlling interests in the three quarters ended June 27, 2023 and was reduced by $138,000 for the three quarters ended June 28, 2022.

3 Represents the portion of a payroll cost rebate attributable to the non-controlling partners in these partnerships.

### Liquidity and Capital Resources

### Cash and Working Capital

As of June 27, 2023, we had a working capital deficit of $6,421,000. Our working capital position benefits from the fact that we generally collect cash from sales to customers the same day, or in the case of credit or debit card transactions, within a few days of the related sale. Although we have negotiated payment terms of up to four weeks with many of our vendors, we pay some of our primary foodservice vendors on 1-3 day payment terms to take advantage of early pay discounts and generally pay most outstanding accounts payable upon review for accuracy and validity. In addition, our working capital position includes the recognition of the current portion of lease liabilities as we lease substantially all of our real estate and have both short-term and long-term obligations to our landlords. We believe that we will have sufficient capital to meet our working capital, recurring operating costs and recurring capital expenditure needs throughout fiscal 2023. As of June 27, 2023 we had $206,000 of commitments outstanding related to a construction contract for the Bad Daddy’s restaurant currently under development in greater Huntsville, Alabama. Construction began in early April 2023 and the restaurant is expected to open in the late fourth quarter of this fiscal year. This construction and the expected resulting expenditures are not anticipated to materially impact the Company’s liquidity or operations.

On January 31, 2022, the Company‘s Board of Directors authorized a $5.0 Million share repurchase program which became effective February 7, 2022. The authorization to repurchase will continue until the maximum value of shares is achieved or the Company terminates the program. The timing and amount of repurchases will depend upon the Company’s stock price, economic and market conditions, regulatory requirements, and other corporate considerations.

### Financing

#### Cadence Credit Facility

The Company and its wholly owned subsidiaries (the “Subsidiaries”) maintain an amended and restated credit agreement with Cadence Bank (“Cadence”) pursuant to which, Cadence agreed to loan the Company up to $8,000,000, has a maturity date of April 20, 2028 (the “Cadence Credit Facility”). The Cadence Credit Facility amended and restated the Company’s prior credit facility with Cadence in its entirety. The Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%. The loans may from time to time consist of a mixture of SOFR Rate Loans and Base Rate Loans with differing interest rates based upon varying additions to the Federal Funds Rate, the Cadence prime rate or Term SOFR. Interest is due at the end of each calendar quarter if the Company selects to pay interest based on the base rate and at the end of each LIBOR period if it selects to pay interest based on LIBOR. The Cadence Credit Facility includes provisions for the Administrative Agent of the facility to amend the facility to replace LIBOR with an alternate benchmark rate, which may be (but is not required to be) SOFR, at such point in time when appliable LIBOR rates are no longer available or no longer reliable. Each of the Subsidiaries are guarantors of the Cadence Credit Facility.

Proceeds from the Cadence Credit Facility, if and when drawn, may be used (i) to fund new restaurant development, (ii) to finance the buyout of non-controlling partners in certain restaurants, (iii) to finance the redemption, purchase or other acquisition of equity interests in the Company and (iv) for working capital and other general corporate purposes.

The Cadence Credit Facility includes customary affirmative and negative covenants and events of default. The Cadence Credit Facility also requires the Company to maintain various financial condition ratios, including minimum liquidity, an amended maximum leverage ratio and an amended minimum fixed charge coverage ratio. In addition, to the extent the aggregate outstanding balance under the Revolver exceeds $4.0 million, the Company is required to meet a new specified leverage ratio, on a pro forma basis, before making further borrowings as well as certain restricted payments, investments and growth capital expenditures.

In connection with the Cadence Credit Facility, the Company and the Subsidiaries entered into an Amended and Restated Security and Pledge Agreement (the “Security Agreement”) with Cadence. Under the Security Agreement, the Cadence Credit Facility is secured by a first priority security interest in substantially all the assets of the Company and the Subsidiaries.

As of June 27, 2023, the interest rate that would have been applicable to borrowings under the Cadence Credit Facility would have been 8.07%.

### Cash Flows

The table below summarizes our cash flows from operating, investing, and financing activities for each period presented (in thousands):

|  | Year-to-date period ended June 27, 2023 | June 28, 2022 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $4,707 | $4,418 |
| Net cash used in investing activities | (7,572) | (1,606) |
| Net cash used in financing activities | (2,357) | (1,964) |
| Net change in cash and cash equivalents | $(5,222) | $848 |

#### Operating cash flows

Net cash provided by operating activities increased by $289,000, primarily due to decreased general and administrative costs, offset by slightly lower restaurant-level profitability as presented on the Condensed Consolidated Statements of Cash Flows.

#### Investing cash flows

Net cash used in investing activities for the three quarters ended June 27, 2023 was $7,572,000 which primarily reflects the purchases of property and equipment of $3,178,000, and the net purchase of all non-controlling interests in our Bad Daddy’s locations of $4,394,000. Purchases of property and equipment is comprised of the following:

- $1,901,000 for miscellaneous capital expenditures related to our existing Bad Daddy’s restaurants, primarily related to the remodel of the Greenville, South Carolina restaurant and the construction of the new restaurant in Madison, Alabama;
- $1,277,000 for capital expenditures related to our existing Good Times restaurants, primarily related to new signs, menu boards and lane timers, and the replacement of HVAC and other restaurant equipment.

Net cash used in investing activities for the three quarters ended June 28, 2022 was $1,606,000 which primarily reflects the general purchases of property and equipment of $1,623,000 and an acquisition of a restaurant from franchisee, net of cash acquired, for $728,000, as well as $745,000 for the proceeds of the sale of a fixed asset. Purchases of property and equipment is comprised of the following:

- $936,000 for miscellaneous capital expenditures related to our existing Bad Daddy’s restaurants, including the payment of amounts in accounts payable at September 29, 2021 associated with the construction of one new Bad Daddy’s restaurant near the end of fiscal 2021
- $471,000 for miscellaneous capital expenditures related to our existing Good Times restaurants
- $216,000 for miscellaneous capital expenditures related to our restaurant support center, primarily initial development costs for the computer software underlying our two brands’ mobile apps and automotive assets used by our internal maintenance team

#### Financing cash flows

Net cash used in financing activities for the three fiscal quarters ended June 27, 2023 was $2,357,000, which includes proceeds from stock option exercises of $5,000 and distributions to (net of contributions by) non-controlling interests of $563,000, $92,000 in restricted stock vesting paid in cash, and $1,720,000 in payments for the purchase of treasury stock.

Net cash used in financing activities for the three fiscal quarters ended June 28, 2022 was $1,964,000, which includes distributions to non-controlling interests of $1,449,000, payment for the repurchase of the Company’s common stock of $605,000 and proceeds from stock option exercise of $90,000.

### Impact of Inflation

Commodity prices, particularly for key proteins, have recently been at near-record highs and have exhibited extreme volatility. Though we have seen some moderation in certain commodities, we continue to experience higher year-over-year prices on many goods, including food and beverage items, paper and packaging, other restaurant supplies, and energy (utilities) costs. Due to the volatility in commodity pricing, we are unable to reasonably predict the impact of future inflationary pressures.

In addition to food cost inflation, we have also experienced the need to meaningfully increase wages to attract workers in our restaurants. While we are hopeful that wage rate inflation moderates, the persistent shortage of qualified workers, rather than statutory wage rate increases, which have traditionally created rate pressure, is the primary factor creating upward pressure on wages, as demand for labor is currently significantly exceeding the supply of qualified workers.

We have historically used menu price increases to manage profitability in times of inflation, however the current unusually high rate of inflation, both of goods and labor, exceeds what we believe we can reasonably pass through to our customers without negatively affecting frequency and trial by our customers.

### Seasonality

Revenues of the Company are subject to seasonal fluctuations based on weather conditions adversely affecting Colorado restaurant sales primarily during the months of December, January, February, and March.

## Controls and procedures

As filed, 886 characters.

### Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this report on Form 10-Q, the Company’s Chief Executive Officer (its principal executive officer and principal financial officer) have concluded that the Company’s disclosure controls and procedures were effective as of June 27, 2023.

### Changes in Internal Control over Financial Reporting

There have been no significant changes in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended June 27, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 1,085 characters.

**The risk factor below updates the risk factors contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 27, 2022 and subsequent filings with the SEC.**

**The inability of the company to successfully negotiate extended terms on leases reaching end-of-term may reduce future profitability.**

The company leases the real estate underlying substantially all of its restaurants. While our leases generally have options for extension of the initial term, in the case of some of our Good Times restaurants, we have exercised all of the options granted to us under the lease. Additionally, some options are set at fair market rental rates, and in the case of one Bad Daddy’s restaurant, no option to extend exists in the lease. Furthermore, many of our Good Times leases are at rates below current market prices. Although the Company has generally been successful in negotiations with our landlords, the risk that we are unable negotiate additional lease term on expiring leases at reasonable rental rates could materially impact our future profitability.

Filed Aug 3, 2023.
Source: SEC EDGAR, the filing index for accession 0001437749-23-021933. Last ingested by Listed: Oct 24, 2026, 14:57 ET. No prices; not investment advice.