GTIM 10-K & 10-Q changes, risk factors and insider trading
Good Times Restaurants Inc. · Nasdaq · Retail-Eating Places · CIK 825324 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Tariffs that are implemented or merely threatened may increase the cost of commodities we purchase for use in our restaurants.”
New heading “Labor organizing could adversely affect our operations and harm our competitive position in the restaurant industry, which could harm our financial performance.”
Largest changes
“Tariffs that are implemented or merely threatened may increase the cost of commodities we purchase for use in our restaurants.”see in full comparison
“Labor organizing could adversely affect our operations and harm our competitive position in the restaurant industry, which could harm our financial performance.”see in full comparison
“The federal government may threaten or implement tariffs on other countries that supply commodities we purchase for use in our restaurants. The tariffs themselves could have the impact of increasing the aggregate purchase cost of the same products or reducing the supply of available products. Additionally, these tariffs may result in retaliation by the affected countries, leading to trade wars with an unpredictable result. …”see in full comparison
“In addition to systems where we directly control the security procedures, policies, and standards, confidential customer information is also handled by third-party service providers. Though our agreements with these service providers typically include indemnification provisions and requirements as to the providers’ security practices, no assurance can be given that these third party providers would be able to provide such indemnification in the case of a significant breach, and many of the same risks, including reputational risk, apply to information they handle. …”see in full comparison
“Our employees or others may attempt to unionize the workforce in one or more of our restaurants, which could increase our labor costs, limit our ability to manage our workforce effectively, negatively impact our ability to adequately serve our guests, and disrupt our operations. A loss of our ability to effectively manage our workforce and the compensation and benefits we offer to our employees could negatively affect our financial performance.”see in full comparison
We are subject to changing rules and regulations arising from governmental, quasi-governmental, and other self-regulatory organizations, including state and localsee in full comparisongovernments, the SEC, the Nasdaq Stock Market and the Financial Accounting Standards Board.governments. These rules and regulations are evolving in scope and complexity and many new requirements have been created in response to recently enacted laws, making compliance more difficult and uncertain. In addition,increasinglyregulators, customers, investors, employees and other stakeholdersaremayfocusingfocus on environmental, social and governance (“ESG”) matters and related disclosures. Within our industry, concerns have been expressed regarding energy sourcing and management, water usage, chemicals used in food and supplies (such as PFAS or other “forever chemicals”), food safety, labor policies and practices and supply chain and management of food sourcing. These changing rules, regulations and stakeholder expectationshave resulted in, and are likely to continue tocould result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations. For example, developing and acting on policies, procedures, and practices within the scope of ESG, and collecting, measuring and reporting ESG related information may be costly and time intensive.Further, these issues are subject to evolving reporting standards, including the SEC’s recently proposed climate-related reporting requirements.We may also communicate certain information regarding ESG-related matters in our SEC filings or in other public disclosures. Even to the extent to which we are not subject to certain rules or regulations, shareholders or other interested parties could make intensive efforts to push for our voluntary compliance with such rules or regulations, or could be criticized for the accuracy or completeness of the disclosure; all of which could lead to increased costs. Our approach towards compliance, whether required or voluntary, toward ESG-related matters, and criticism over such, could adversely affect our reputation, business and financial performance.
Full comparison: every changed paragraph (13)
Our operations are susceptible to the cost
ofof, and changes inin, food availability which could adversely affect our operating results.
Tariffs that are implemented or merely threatened may increase the cost of commodities we purchase for use in our restaurants.
The federal government may threaten or implement tariffs on other countries that supply commodities we purchase for use in our restaurants. The tariffs themselves could have the impact of increasing the aggregate purchase cost of the same products or reducing the supply of available products. Additionally, these tariffs may result in retaliation by the affected countries, leading to trade wars with an unpredictable result. We may not be able to offset increased cost through menu price increases, and even if we were to increase menu prices to cover some or all of the increased cost, such action could lead to decreased traffic to our restaurants which would negatively affect our financial results. During fiscal 2025 the ground beef market price indices reached record highs, due to multiple factors, one of which was tariffs imposed on foreign beef-exporting nations.
Labor organizing could adversely affect our operations and harm our competitive position in the restaurant industry, which could harm our financial performance.
Our employees or others may attempt to unionize the workforce in one or more of our restaurants, which could increase our labor costs, limit our ability to manage our workforce effectively, negatively impact our ability to adequately serve our guests, and disrupt our operations. A loss of our ability to effectively manage our workforce and the compensation and benefits we offer to our employees could negatively affect our financial performance.
We have increased same store sales for thirteen
of the past fourteenfifteen years at Good Times. We have operated Bad Daddy’s for a shorter period of time and have recently experienced
declines in same store sales. Same store sales increases will depend in part on the success of our advertising and promotion of new and
existing menu items and consumer acceptance and could be greatly impacted by changes in general customer behavior and preferences. If
our same store sales decline, and our operating costs increase, our ability to attain profitability will be adversely affected.
The hamburger restaurant market is highly competitive. Our competitors in the quick-service restaurant segment include many recognized national and regional fast-food hamburger restaurant chains, such as McDonald’s, Burger King, Wendy’s, Carl’s Jr., Sonic, Jack in the Box, Freddy’s and Culver’s. In-N-Out has expanded into the state of Colorado, the primary state in which we operate, and is continuing to expand in the market, and Whataburger has expanded into the state of Colorado with future development expected in markets where we currently operate. We also compete with small regional and local hamburger and other fast-food restaurants, many of which feature drive-thru service. Increasingly, fast casual burger restaurants such as Shake Shack have incorporated drive-thru service into their operating model, and in the case of Shake Shack, also feature an all-natural beef platform. Finally, new competitors in the business of selling sliders which compete with our Bambino product, have begun to penetrate the Colorado market. Most of our competitors have greater financial resources, marketing programs and name recognition than we do. Discounting by our quick-service restaurant competitors may adversely affect the revenues and profitability of our restaurants.
We believe our current operations and future success
depend largely on the continued services of our management employees, particularly Ryan Zink, our President and Chief Executive Officer,Officer
and Keri August our Senior Vice President of Finance and AccountingAccounting. and Don Stack, our Senior Vice President of Operations for Good Times.
Although we have entered into an employment agreement with Mr. Zink,
he may voluntarily terminate his employment with us at any time.
In addition, we do not currently maintain key-person insurance on the
lives of Messrs. Zink or Stack or Ms. August. We have not entered
into any employment agreementsagreement with Ms. August; orshe Mr.is Stack,an and both are employeesemployee at will. The
loss of services by Messrs.Mr. Zink or Stack
or Ms. August, or those of other key management personnel, could have a material adverse effect on our financial
condition and results
of operations.
In addition to systems where we directly control the security procedures, policies, and standards, confidential customer information is also handled by third-party service providers. Though our agreements with these service providers typically include indemnification provisions and requirements as to the providers’ security practices, no assurance can be given that these third party providers would be able to provide such indemnification in the case of a significant breach, and many of the same risks, including reputational risk, apply to information they handle. In the case of delivery service providers, the end user is a direct customer of the delivery provider, however reputational risk to our Company still exists with respect to those customers who receive food and beverage through us that has been delivered by such service provider.
We rely on our computer systems and network infrastructure across our operations, including point-of-sale processing at our restaurants and various cloud-based systems that are an integral part of our operations and financial reporting processes. Our operations depend upon our ability to protect our technology and digital assets against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches or attacks, malware, and other disruptions. Any damage or failure of our computer systems or network infrastructure or any cybersecurity incident that causes an interruption in our operations or otherwise compromises our technology or digital assets, an interruption in our operations or otherwise compromises our computer systems or network infrastructure, or if software or third-party vendors that support our information technology environment are compromised, our business, financial condition and results of operations could be harmed and subject us to litigation or actions by regulatory authorities. These risks extend beyond services with which we directly contract. Recent outages with cloud infrastructure providers such as Amazon’s AWS, can cascade throughout multiple systems and could inhibit the majority or entirety of our system from accepting orders or otherwise operating. Further, adverse publicity resulting from such an event may harm our business, financial condition and results of operations. Although we have a comprehensive program to protect and mitigate risks associated with physical infrastructure and digital assets, including various vulnerability thefts, firewalls, data encryption and other security controls and intend to maintain and upgrade our security technology and operational procedures to prevent damage, breaches or other disruptions, these measures may not eliminate all risks Further, although we purchase cybersecurity insurance, such insurance is a responsive, not a preventive measure, and there can be no assurances that the limits of the policy will be sufficient to cover the costs associated with a cybersecurity event.
The Bad Daddy’s Burger Bar concept has been
in existence for approximately seventeeneighteen years and the average age for all Bad Daddy’s restaurants, as of the date of this filing,
is approximately eightnine years. Existing restaurants are currently located in Alabama, Colorado, Georgia, North Carolina, Oklahoma, South
Carolina, and Tennessee. Because of the small number of existing Bad Daddy’s Burger Bar restaurants and the relatively short period
of time that they have been in operation, there is substantial uncertainty that additional restaurants in other locations will be successful.
Though the Company currently has no franchisee-owned restaurants, the Company has offered franchises in the past and may do so again in
the future. There is no guarantee that we will be successful in offering Bad Daddy’s Burger Bar franchises throughout the U.S. or
that, if and when, such franchises are granted, the restaurants developed by franchisees will be successful.
We are subject to changing rules and regulations
arising from governmental, quasi-governmental, and other self-regulatory organizations, including state and local governments, the SEC,
the Nasdaq Stock Market and the Financial Accounting Standards Board.governments. These rules
and regulations are evolving in scope and complexity
and many new requirements have been created in response to recently enacted laws,
making compliance more difficult and uncertain. In addition,
increasingly regulators, customers, investors, employees and other stakeholders aremay focusing focus
on environmental, social and governance (“ESG”)
matters and related disclosures. Within our industry, concerns have been expressed
regarding energy sourcing and management, water usage,
chemicals used in food and supplies (such as PFAS or other “forever chemicals”),
food safety, labor policies and practices
and supply chain and management of food sourcing. These changing rules, regulations and stakeholder
expectations have resulted in, and
are likely to continue tocould result in, increased general and administrative expenses and increased management time and attention spent complying
with or meeting such regulations and expectations. For example, developing and acting on policies, procedures, and practices within the
scope of ESG, and collecting, measuring and reporting ESG related information may be costly and time intensive. Further, these issues
are subject to evolving reporting standards, including the SEC’s recently proposed climate-related reporting requirements. We may
also communicate
certain information regarding ESG-related matters in our SEC filings or in other public disclosures. Even to the extent
to which we are
not subject to certain rules or regulations, shareholders or other interested parties could make intensive efforts to
push for our voluntary
compliance with such rules or regulations, or could be criticized for the accuracy or completeness of the disclosure;
all of which could
lead to increased costs. Our approach towards compliance, whether required or voluntary, toward ESG-related matters,
and criticism over
such, could adversely affect our reputation, business and financial performance.
The upcomingincreasingly Presidentialdynamic administrationnature changeof the federal
government may increaseaffect the likelihood for Congress to amend existing immigration laws or adopt new immigration laws. Further, recent policy
decisions from the current federal government administration related
to themore strict enforcement of, and rulemaking related to, immigration
laws havehas beensignificantly volatilealtered andthe subjectcurrent toenvironment. changes resulting from election cycles.
Those policies include thea lesser degree of tolerance of undocumented workers employed
in various segments of the workforce. Various subsegments
of the agricultural industry, as well as the QSR subsegment of the restaurant
industry itself are at risk for employees who obtain fraudulent
documentation but that contains data related to actual individuals or
are of such quality that they may not be detected through appropriate
document validation practices. Any new or modified immigration laws
or a further change in these policy decisions may have an adverse impact on
the number of individuals participating in these markets,
and may reduce the total number of employees in the population from which we
recruit, affecting our ability to conduct our business, and
with respect to our suppliers, may have an adverse impact on their ability
to produce products that we purchase for ingredients in our
recipes.
Management's Discussion & Analysis (MD&A)
Largest changes
Wesee in full comparisonremainare contingently liable onvariousaleaseslease underlyingunderlyingarestaurantsrestaurant operated by a franchisee. In addition, we are contingently liable for properties thatwerewepreviouslyhavesoldsubleased tofranchisees.unrelated parties. We have never experienced any losses related to these contingent lease or sublease liabilities, however ifathe franchiseedefaultsor unrelated parties default on the payments under theleases,leases or subleases, we would be liable for the lease payments as the assignor or sub-lessor of the lease. Currently we have not been notified nor are we aware of any leases or subleases in default by thefranchisees,franchisee or unrelated parties, however there can be no assurance that there will not be in the future which could have a material effect on our future operating results.
“There is continued uncertainty regarding the degree of inflation and its associated impact on our business related to tariffs that have been implemented or threatened to be imposed on other countries, some of which are sources of food and packaging supplies for our business.”see in full comparison
“Long-lived Asset Impairment Charges: For fiscal 2025, the asset impairment charge was $627,000 compared to $698,000 in fiscal 2024. We review long-lived assets and intangibles subject to amortization for impairment when there are factors that indicate the carrying value of such assets may not be recoverable. …”see in full comparison
“Long-lived Asset Impairment Charges: For fiscal 2024, the asset impairment charge was $698,000 compared to $1,589,000 in fiscal 2023. We review long-lived assets and intangibles subject to amortization for impairment when there are factors that indicate the carrying value of such assets may not be recoverable. The current year impairment costs are primarily attributable to the impairment of the lease right-of-use assets of two Bad Daddy’s locations. …”see in full comparison
“Depreciation and Amortization Costs: Depreciation and amortization includes depreciation on capital expenditures for restaurants and corporate assets as well as amortization of acquired franchise rights and leasehold interests. For fiscal 2024, depreciation and amortization costs increased $92,000 to $3,755,000 compared to $3,663,000 in fiscal 2023. The increases are due to additional company-owned restaurants, newly deployed assets including signs, menu boards, and restaurant remodels, partially offset by the prior year impairment of assets for two restaurants.”see in full comparison
“Good Times payroll and other employee benefit costs were $13,952,000 (35.6% of restaurant sales) in fiscal 2025, up from $12,858,000 (33.8% of restaurant sales) in fiscal 2024. …”see in full comparison
Full comparison: every changed paragraph (80)
We operate as two reportable business segments:
Good Times Burgers and Frozen Custard (“Good Times”) and Bad Daddy’s Burger Bar (“Bad Daddy’s”). All
of our Good Times restaurants compete in the quick servicequick-service drive-thru segment of the restaurant industry while our Bad Daddy’s restaurants
compete in the full-service casual dining segment of the restaurant industry. We believe that providing this additional financial information
for each of our brands will provide a better understanding of our overall operating results. Refer to Note 10, Segment Reporting,
in the notes to our consolidated financial statements for more information.
The Company’s fiscal year is a 52/53-week
year ending on the last Tuesday of September. In a 52-week fiscal year, each of the Company’s quarterly periods comprises 13 weeks.
The additional week in a 53-week fiscal year is added to the first quarter, making such quarter consist of 14 weeks. Our discussion for
the fiscal years ending September 24,30, 20242025 and September 26,24, 20232024 each cover periods of 53 and 52 full calendar weeks.weeks, respectively. Fiscal 2025
2026 will consist
of 5352 weeks and end on September 30,29, 2025.2026.
Prior to fiscal 2025, certain general and administrative expenses now included in Other were combined and reported with our Bad Daddy's segment. In order to better align with our internal reporting and provide a better representation of restaurant-level operations, beginning with fiscal 2025, these expenses have been removed from the Bad Daddy's segment and are now stated separately in Other. Fiscal 2024 figures were recast for comparability. Unallocated costs such as human resources, finance, purchasing, restaurant development and administration are recorded at the Corporate level and are included in Other. The amounts reported for each reportable business segment contain allocations from Corporate for items such as technology support, repair and maintenance, marketing and restaurant accounting. In addition, Corporate collects rent from the Good Times segment related to one restaurant for which Corporate owns the real estate. There are no material transactions between our reportable business segments.
We currently operate thirty-ninethirty-seven company-owned
Bad Daddy’s restaurants. We also license one restaurant in North Carolina.
Commodity prices have been more stable during
fiscal 2024,2025 thoughrelative to the prior 3 years, with dairy byproducts, chicken, and eggs moderating. Though beef and bacon arewere at or are near
record highs andduring the last quarter of fiscal 2025, they have exhibitedrecently extremebegan volatility.to decrease.
There is continued uncertainty regarding the degree of inflation and its associated impact on our business related to tariffs that have been implemented or threatened to be imposed on other countries, some of which are sources of food and packaging supplies for our business.
Net Revenues: Net revenues for fiscal 20242025
increaseddecreased $4,155,000$750,000 (3.0%0.5%) to $142,315,000$141,630,000 from $138,160,000$142,380,000 for fiscal 2023.2024. Bad Daddy’s concept revenues increaseddecreased $1,327,000$1,696,000 while
while our Good Times concept revenues increased $2,828,000.$949,000.
Bad Daddy’s restaurant sales increaseddecreased $1,298,000$2,154,000
to $101,385,000 in fiscal 2025 from $103,539,000 in fiscal 2024 from $102,241,000 in fiscal 2023.2024. This increasedecrease is a result of the fourthclosure of one restaurant near the end
of fiscal 2024, reduced customer traffic and by negative mix shift attributable to the success of the Company’s smashed patty burgers,
partially offset by an additional week in the first fiscal quarter 2023 Madison, Alabama
restaurant opening,versus the prior year remodelfirst temporaryfiscal closure of the Greenville, South Carolina restaurant,quarter and menu price increasesincreases.
Bad partially
offset by the prior year closure of the Cherry Creek restaurant and reduced customer traffic, concentrated in certain restaurants. Bad
Daddy’s same store restaurant sales, also referred to as comparable sales, decreased 1.2%2.1% during fiscal 20242025 compared to fiscal
2023.2024. Bad Daddy’s restaurants are included in same store sales after they have been open a full eighteen months. This decrease is
primarily driven by generalreduced weakness in the casual dining restaurant segment as indicated by sequentially lower same store sales as measured
by Black Box Intelligence, weakercustomer traffic specificand tovalue Badoffered Daddy’sthrough indrink certainspecials restaurants,and discounted sides, partially offset by menu price
increases. increases.
The average menu price increase was approximately 4.6%3.3% in 20242025 over 2023.2024. There were thirty-eight restaurants included
in the same store
sales base at the end of the fiscal year. Additionally, net revenues for fiscal 20242025 were increased by $29,000gift incard breakage
of $439,000 and license fees of $19,000 compared
to the prior fiscal year.
Good Times restaurant sales increased $1,213,000 to $39,229,000 in fiscal 2025 from $38,016,000 in fiscal 2024. This increase is driven by the first quarter 2025 acquisition of two Good Times restaurants, the third quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, the third quarter 2024 temporary closure of one Good Times restaurant for remodel, and an additional week in the first fiscal quarter versus the prior year first fiscal quarter, partially offset by the fourth quarter 2024 closure of one Good Times restaurant as well as the first quarter 2025 temporary closure of one Good Times restaurant for remodel, and reduced customer traffic. Same store restaurant sales decreased 5.0% during fiscal 2025 compared to fiscal 2024. This decrease is primarily due to decreased customer traffic, partially offset by a menu price increase. The average menu price increase in fiscal 2025 over fiscal 2024 was approximately 1.0%. Additionally, revenues for fiscal 2025 decreased by $264,000 in lower franchise revenues compared to fiscal 2024, primarily due to the acquisition of two Good Times restaurants previously owned by a franchisee in early fiscal 2025 as well as the acquisition of one Good Times restaurant previously owned by a franchisee in the third fiscal quarter of 2024. Fiscal 2025 and fiscal 2024 for Good Times include franchise advertising contributions of $68,000 and $179,000, respectively.
Good Times restaurant sales increased $3,028,000
to $38,016,000 in fiscal 2024 from $34,988,000 in fiscal 2023. This increase is primarily due to the acquisition, by the Company during
fourth quarter 2023, of two Good Times restaurants previously owned by franchisees, the current fiscal year acquisition of a Good Times
restaurant previously owned by a franchisee, increased customer traffic, and menu price increases. Same store restaurant sales increased
2.9% during fiscal 2024 compared to fiscal 2023. This increase is primarily due to menu price increases and increased customer traffic.
The average menu price increase in fiscal 2024 over fiscal 2023 was approximately 4.0%. Additionally, revenues for fiscal 2024 decreased
by $200,000 in lower franchise revenues compared to fiscal 2023. Fiscal 2024 and fiscal 2023 for Good Times include franchise advertising
contributions of $179,000 and $261,000, respectively.
Food and Packaging Costs: For fiscal 2024,
food and packaging costs increased $794,000 to $43,704,000 (30.9% of restaurant sales) compared to $42,910,000 (31.3% of restaurant sales)
in fiscal 2023.
Bad Daddy’s food and packaging costs were
$32,155,000 (31.1% of restaurant sales) in fiscal 2024, up from $31,972,000 (31.3% of restaurant sales) in fiscal 2023. This increase
is primarily attributable to the fourth quarter 2023 Madison, Alabama restaurant opening, and the prior year closure of the Cherry Creek
restaurant partially offset by lower average unit volumes. The decrease, as a percent of sales, is attributable to the impact of a 4.6%
average annual increase in menu pricing.
Good Times food and packaging costs were $11,549,000
(30.4% of restaurant sales) in fiscal 2024, up from $10,938,000 (31.3% of restaurant sales) in fiscal 2023. This increase is primarily
attributable to the acquisition, by the Company during fiscal 2023, of two Good Times restaurants previously owned by franchisees and
the current fiscal year acquisition of a Good Times restaurant previously owned by a franchisee. The decrease, as a percent of sales,
is primarily attributable to the impact of a 4.0% average annual increase in menu pricing.
Payroll and Other Employee Benefit Costs:
For fiscal 2024, payroll and other employee benefit costs increased $1,140,000 to $48,689,000 (34.4% of restaurant sales) compared to
$47,549,000 (34.6% of restaurant sales) in fiscal 2023.
Bad Daddy’s payroll and other employee benefit
costs were $35,831,000 (34.6% of restaurant sales) for fiscal 2024, down from $35,892,000 (35.1% of restaurant sales) in fiscal 2023.
The $61,000 decrease is primarily attributable to incentive compensation plan revisions, the prior fiscal year closure of one Denver,
Colorado restaurant mostly offset by increases due to the fourth quarter 2023 Madison, Alabama restaurant opening, and the prior year
remodel temporary closure of the Greenville, South Carolina restaurant. As a percent of sales, payroll and employee benefits costs decreased
by 0.5% primarily attributable to incentive compensation plan revisions and a 4.6% increase in menu pricing.
Good Times payroll and other employee benefit
costs were $12,858,000 (33.8% of restaurant sales) in fiscal 2024, up from $11,657,000 (33.3% of restaurant sales) in fiscal 2023. The
$1,201,000 increase is attributable to labor associated with three additional company-owned restaurants, an increase in operating hours
caused by later closing times in nearly every restaurant, and higher average wage rates resulting from market forces and the CPI-indexed
minimum wage in Denver and the state of Colorado, partially offset by increased labor productivity. As a percent of sales, payroll and
employee benefits costs increased by 0.5% in fiscal 2024 compared to fiscal 2023. This increase was primarily attributable to increased
wage rates, partially offset by menu price increases and increased labor productivity.
Occupancy Costs: Occupancy costs include
rent, real and personal property taxes, common area maintenance expenses, licenses and insurance expense. For fiscal 2024, occupancy costs
increased $480,000 from $9,607,000 (7.0% of restaurant sales) in fiscal 2023 to $10,087,000 (7.1% of restaurant sales).
Bad Daddy’s occupancy costs were $6,676,000
(6.4% of restaurant sales) for fiscal 2024, up from $6,642,000 (6.5% of restaurant sales) in fiscal 2023.
Good Times occupancy costs were $3,411,000 (9.0%
of restaurant sales) in fiscal 2024, up from $2,965,000 (8.5% of restaurant sales) in fiscal 2023. The
increase was primarily attributable to the costs incurred for three additional company-owned restaurants as well as real property
tax increases resulting from increased property valuations.
OtherFood Operatingand Packaging Costs: For fiscal 2024,2025,
otherfood operatingand packaging costs increased $1,275,000$183,000 to $20,288,000$43,887,000 (14.3%31.2% of restaurant sales) upcompared fromto $19,013,000$43,704,000 (13.9%30.9% of restaurant sales)
in fiscal 2023.2024.
Bad Daddy’s food and packaging costs were $31,520,000 (31.1% of restaurant sales) in fiscal 2025, down from $32,155,000 (31.1% of restaurant sales) in fiscal 2024. This decrease is primarily attributable to the closure of one Bad Daddy’s restaurant during the fourth quarter of fiscal 2024, lower average unit volumes, and lower purchase prices, primarily for chicken wings and potatoes, partially offset by an additional week in the first fiscal quarter versus the prior year first fiscal quarter and increased ground beef costs.
Good Times food and packaging costs were $12,367,000 (31.5% of restaurant sales) in fiscal 2025, up from $11,549,000 (30.4% of restaurant sales) in fiscal 2024. This increase is driven by the first quarter 2025 acquisition of two Good Times restaurants, the third quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, the third quarter 2024 temporary closure of one Good Times restaurant for remodel, an additional week in the first fiscal quarter versus the prior year first fiscal quarter, partially offset by the fourth quarter 2024 closure of one Good Times restaurant as well as the first quarter 2025 temporary closure of one Good Times restaurant for remodel. The increase, as a percent of sales, is primarily attributable to higher purchase prices on ground beef and eggs, partially offset by the impact of the 1.0% increase in menu pricing compared to the prior year.
Payroll and Other Employee Benefit Costs: For fiscal 2025, payroll and other employee benefit costs increased $588,000 to $49,277,000 (35% of restaurant sales) compared to $48,689,000 (34.4% of restaurant sales) in fiscal 2024.
Bad Daddy’s payroll and other operatingemployee benefit
costs were $15,296,000
$35,325,000 (14.8%34.8% of restaurant sales) for fiscal 2024,2025, updown from $14,834,000$35,831,000 (14.5%34.6% of restaurant sales) in fiscal 2023. 2024.
The $462,000$506,000 increasedecrease is
primarily attributable to the fourth fiscal quarter 20232024 Madison,closure Alabamaof restaurantone opening,Bad andDaddy’s restaurant, as well
as reduced restaurant-level incentive compensation, partially offset by an additional week in the first fiscal quarter versus the prior
year remodelfirst temporaryfiscal closurequarter and decreased labor productivity. As a percent of thesales, Greenville,payroll Southand Carolinaemployee restaurant,benefits costs increased repairby and0.2%
maintenanceprimarily andattributable otherto employee-relateddecreased expenses,labor productivity resulting from the deleveraging impact of lower sales, partially offset by reduced
incentive restaurantcompensation supplyas costs.well as the impact of the 3.3% increase in average menu pricing.
Good Times payroll and other employee benefit costs were $13,952,000 (35.6% of restaurant sales) in fiscal 2025, up from $12,858,000 (33.8% of restaurant sales) in fiscal 2024. The $1,094,000 increase is primarily attributable to the first quarter 2025 acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, the third quarter 2024 temporary closure of one Good Times restaurant for remodel, an additional week in the first fiscal quarter versus the prior year first fiscal quarter and decreased labor productivity, partially offset by the fourth quarter 2024 closure of one Good Times restaurant as well as the first quarter 2025 temporary closure of one Good Times restaurant for remodel. As a percent of sales, payroll and employee benefits costs increased by 1.8% in fiscal 2025 compared to fiscal 2024. This increase was primarily attributable to higher average wage rates and decreased labor productivity resulting from the deleveraging impact of lower sales, partially offset by decreased incentive compensation.
Occupancy Costs: Occupancy costs include rent, real and personal property taxes, common area maintenance expenses, licenses and insurance expenses. For fiscal 2025, occupancy costs increased $143,000 from $10,087,000 (7.1% of restaurant sales) in fiscal 2024 to $10,230,000 (7.3% of restaurant sales).
Bad Daddy’s occupancy costs were $6,658,000 (6.6% of restaurant sales) for fiscal 2025, down from $6,796,000 (6.6% of restaurant sales) in fiscal 2024, the notional decrease resulting primarily from the restaurant closed in the fourth quarter of fiscal 2024.
Good Times occupancy costs were $3,655,000 (9.3% of restaurant sales) in fiscal 2025, up from $3,411,000 (9.0% of restaurant sales) in fiscal 2024. The increase was primarily due to the first quarter 2025 acquisition of two Good Times restaurants, and the third fiscal quarter 2024 acquisition of one Good Times restaurant, previously owned by franchisees, partially offset by the closure of one Good Times restaurant during the fourth quarter of fiscal 2024.
Good Times other operating costs were $4,992,000
(13.1% of restaurant sales) in fiscal 2024, up from $4,179,000 (11.9% of restaurant sales) in fiscal 2023. The increase was primarily
attributable to costs associated with three additional company-owned restaurants, as well as increased repair and maintenance, credit
card and customer delivery fees and higher utility expenses.
New Store Preopening Costs: For fiscal
2024, we had no preopening costs compared to $484,000 in fiscal 2023.
Depreciation and Amortization Costs: Depreciation
and amortization includes depreciation on capital expenditures for restaurants and corporate assets as well as amortization of acquired
franchise rights and leasehold interests. For fiscal 2024, depreciation and amortization costs increased $92,000 to $3,755,000 compared
to $3,663,000 in fiscal 2023. The increases are due to additional company-owned restaurants, newly deployed assets including signs, menu
boards, and restaurant remodels, partially offset by the prior year impairment of assets for two restaurants.
Bad Daddy’s depreciation costs decreased
$98,000 from $3,060,000 in fiscal 2023 to $2,962,000 in fiscal 2024.
Good Times depreciation costs increased $190,000
from $603,000 in fiscal 2023 to $793,000 in fiscal 2024.
General and Administrative Costs: General
and administrative costs include all corporate and administrative functions. Components of this category include accounting and administrative
costs, regional and franchise support salaries and benefits; professional and consulting fees; travel; corporate information systems;
training; board of directors’ expenses; office rent; and legal expenses. For fiscal 2024, general and administrative costs increased
$1,351,000 from $9,165,000 (6.6% of total revenue) in fiscal 2023 to $10,516,000 (7.4% of total revenue) in fiscal 2024.
The $1,351,000 increase in general and administrative
expenses in fiscal 2024 is primarily attributable to:
AdvertisingOther Operating Costs: For fiscal 2024,2025,
other advertising
operating costs increased $270,000$449,000 to $20,737,000 (14.7% of restaurant sales) up from $3,258,000$20,288,000 (2.4%14.3% of totalrestaurant revenuessales) in fiscal 2023 to $3,528,000 (2.5% of total revenues) in
fiscal 2024.
Bad Daddy’s other operating costs were $15,373,000 (15.2% of restaurant sales) for fiscal 2025, up from $15,364,000 (14.8% of restaurant sales) in fiscal 2024. As a percent of sales, other operating costs increased by 0.4% in fiscal 2025 compared to fiscal 2024. This increase was primarily attributable to higher repair and maintenance, utility and technology expenses.
Good Times other operating costs were $5,730,000 (14.6% of restaurant sales) in fiscal 2025, up from $4,992,000 (13.1% of restaurant sales) in fiscal 2024. As a percent of sales, other operating costs increased by 1.5% in fiscal 2025 compared to fiscal 2024. This increase was primarily attributable to higher repair and maintenance, technology and utility expenses.
New Store Preopening Costs: For fiscal 2025, preopening costs were $8,000 compared to no preopening costs for fiscal 2024. The current fiscal year costs primarily relate to training costs incurred as part of our two Good Times restaurant acquisitions.
Depreciation and Amortization Costs: Depreciation and amortization includes depreciation on capital expenditures for restaurants and corporate assets as well as amortization of acquired franchise rights and leasehold interests. For fiscal 2025, depreciation and amortization costs increased $199,000 to $3,954,000 compared to $3,755,000 in fiscal 2024. The increase is primarily due to additional company-owned restaurants and restaurant remodels.
Bad Daddy’s advertising costs increased
$307,000 from $1,866,000 (1.8% of total revenues) in fiscal 2023 to $2,173,000 (2.1% of total revenues) in fiscal 2024. The increase is
primarily due to increases in third party gift card commissions and printing costs, partially offset by decreases in local store marketing
and media services. Bad Daddy’s advertising costs consist primarily of menu development, printing costs, local store marketing and
social media. All restaurants contribute to an advertising materials fund based on a percentage of restaurant sales.
We anticipate that Bad Daddy’s advertising
costs as a percentage of net revenues will decrease to between 1.5% and 2.0% in fiscal 2025.
Good Times advertising costs decreased $37,000
from to $1,392,000 (3.9% of total revenues) in fiscal 2023 to $1,355,000 (3.5% of total revenues) in fiscal 2024. The decrease is primarily
due to a reduction in TV media and an increase in product rebates, partially offset by increased market research. Good Times advertising
costs consist primarily of contributions made to the advertising materials fund and a regional advertising cooperative based on a percentage
of restaurant sales which are used to provide radio advertising, social media, on-site and point-of-purchase materials. Advertising costs
are presented gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.
We anticipate that in fiscal 2025 Good Times advertising
costs as a percentage of net revenues will decrease to between 2.5% and 3.0%.
Loss (Gain) on Restaurant Asset Disposals:
For fiscal 2024, the loss on restaurant asset disposals was $2,000 compared to a gain of $41,000 in fiscal 2023. The net loss in fiscal
2024 is primarily due to restaurant fixed asset retirements, mostly offset by a deferred gain on previous sale lease-back transactions
related to two Good Times restaurants. The gain in fiscal 2023 is primarily comprised of a deferred gain on previous sale lease-back transactions
related to two Good Times restaurants.
Long-lived Asset Impairment Charges: For
fiscal 2024, the asset impairment charge was $698,000 compared to $1,589,000 in fiscal 2023. We review long-lived assets and intangibles
subject to amortization for impairment when there are factors that indicate the carrying value of such assets may not be recoverable.
The current year impairment costs are primarily attributable to the impairment of the lease right-of-use
assets of two Bad Daddy’s locations. During fiscal 2023 we recorded non-cash charges of $1,519,000 and $70,000 related to
four Bad Daddy’s locations and two Good Times locations, respectively.
Litigation Contingencies: There
was $332,000 of income related to the adjustment of the Company’s litigation contingency reserve during fiscal 2024. This adjustment
is due to the reversal of our previous contingency reserve of $332,000. The Company did not record any changes in litigation contingencies
in fiscal 2023.
Income from Operations: Income from operations
was $1,380,000 in fiscal 2024 compared to income from operations of $963,000 in fiscal 2023. The change from fiscal 2023 to fiscal 2024
was primarily attributable to matters discussed in the relevant sections above.
InterestBad Daddy’s depreciation costs increased
Expense:$29,000 Interestfrom expense$2,921,000 was $125,000 duringin fiscal 2024,2024 comparedto with$2,950,000 $78,000 duringin fiscal 2023.2025.
Good Times depreciation costs increased $171,000 from $793,000 in fiscal 2024 to $964,000 in fiscal 2025.
General and Administrative Costs: General and administrative costs include all corporate and administrative functions. Components of this category include accounting and administrative costs, regional and franchise support salaries and benefits; professional and consulting fees; travel; corporate information systems; training; board of directors’ expenses; office rent; and legal expenses. For fiscal 2025, general and administrative costs decreased $847,000 from $10,581,000 (7.4% of total revenue) in fiscal 2024 to $9,734,000 (6.9% of total revenue) in fiscal 2025.
The $847,000 decrease in general and administrative expenses in fiscal 2025 is primarily attributable to:
Advertising Costs: For fiscal 2025, advertising costs decreased $213,000 from $3,528,000 (2.5% of total revenues) in fiscal 2024 to $3,315,000 (2.3% of total revenues) in fiscal 2025.
Bad Daddy’s advertising costs increased $18,000 from $1,876,000 (1.8% of total revenues) in fiscal 2024 to $1,894,000 (1.9% of total revenues) in fiscal 2025. The increase is primarily due to increases in TV and outdoor media partially offset by a decrease in social media advertising. Bad Daddy’s advertising costs consist primarily of third-party gift card commissions, menu development, printing costs, local store marketing and social media. All restaurants contribute to an advertising materials fund based on a percentage of restaurant sales.
Good Times advertising costs increased $63,000 from $1,355,000 (3.5% of total revenues) in fiscal 2024 to $1,418,000 (3.6% of total revenues) in fiscal 2025. The increase is primarily due to increased outdoor and social media expenses, sponsorships and agency fees, partially offset by decreased radio media expense. Good Times advertising costs consist primarily of radio advertising, agency fees and social media. Advertising costs are presented gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.
(Gain) loss on lease terminations and asset disposals: For fiscal 2025, the net gain on lease terminations and asset disposals was $469,000 compared to a net loss of $2,000 in fiscal 2024. The net gain in fiscal 2025 is primarily due to gains on lease terminations related to three Bad Daddy’s locations. The net loss in fiscal 2024 was primarily due to restaurant fixed asset retirements, mostly offset by a deferred gain on previous sale lease-back transactions related to two Good Times restaurants.
Long-lived Asset Impairment Charges: For fiscal 2025, the asset impairment charge was $627,000 compared to $698,000 in fiscal 2024. We review long-lived assets and intangibles subject to amortization for impairment when there are factors that indicate the carrying value of such assets may not be recoverable. The current year impairment costs are primarily attributable to the impairment of lease right-of-use assets for two Bad Daddy’s locations, the impairment of one Good Times location, as well as new assets deployed in restaurants where impairment was previously assessed and the Company’s current analysis indicated impairment of assets associated with those restaurants. During fiscal 2024 we recorded non-cash impairment charges of $689,000 and $9,000 related to Bad Daddy’s and Good Times, respectively.
Litigation Contingencies: There were no litigation contingency costs during fiscal 2025. There was $332,000 of income related to the adjustment of the Company’s litigation contingency reserve during fiscal 2024.
Provision
for Income Taxes: There was a $624,000 benefit from income taxes for fiscal 2024, primarily
driven by changes in the projections of full-year net income and available tax credits. There was a $10,787,000 benefit for fiscal 2023.
The most significant driver of the prior year benefit was the release of the valuation allowance previously assessed on the deferred tax
assets. See Note 7 to the Consolidated Financial Statements included in this report for further information.
NetIncome from Operations: Income: Netfrom incomeoperations
was for$330,000 in fiscal 2024
was $1,879,0002025 compared to net income of $11,672,000$1,380,000 in fiscal 2023.2024. The change from fiscal 20232024 to fiscal 20242025 was primarily attributable
to the matters discussed in the relevant sections above.
What changed in the latest 10-Q
Risk Factors
Risk factors associated with our business are contained in Item 1A, "Risk Factors," of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 filed with the SEC on December 29, 2025. There have been no material changes from the risk factors disclosed in the aforementioned filings.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Fiscal three quarters ended June 30, 2026 (39 weeks) compared to fiscal three quarters ended July 1, 2025 (40 weeks):”
Removed heading “Fiscal two quarters ended March 31, 2026 (26 weeks) compared to fiscal two quarters ended April 1, 2025 (27 weeks):”
Largest changes
“Fiscal three quarters ended June 30, 2026 (39 weeks) compared to fiscal three quarters ended July 1, 2025 (40 weeks):”see in full comparison
“Fiscal two quarters ended March 31, 2026 (26 weeks) compared to fiscal two quarters ended April 1, 2025 (27 weeks):”see in full comparison
“Impairment of Long-lived Assets and ROU Assets. There were $227,000 of costs associated with impairments for the quarter ended March 31, 2026. There were $494,000 of impairment costs for the quarter ended April 1, 2025. The current quarter impairment costs are attributable to the temporary closure of one Good Times restaurant. …”see in full comparison
“Impairment of Long-lived Assets and ROU Assets. There were $227,000 of costs associated with impairments for the two quarters ended March 31, 2026. There were $494,000 of impairment costs for the two quarters ended April 1, 2025. The current year impairment costs are attributable to the temporary closure of one Good Times restaurant. …”see in full comparison
“Impairment of Long-Lived Assets Costs. The were $245,000 of costs associated with impairments for the three quarters ended June 30, 2026. There were $494,000 of impairment costs for the three quarters ended July 1, 2025. The current year impairment costs are primarily attributable to one Good Times restaurant. …”see in full comparison
“Impairment of Long-Lived Assets and ROU Assets. There were $18,000 of costs associated with impairments for the quarter ended June 30, 2026. There were no impairment costs for the quarter ended July 1, 2025. The current quarter impairment costs relate to the right-of-use asset for a Bad Daddy’s location destroyed in a casualty event.”see in full comparison
Full comparison: every changed paragraph (141)
Overview.
Good Times
Restaurants Restaurant Inc., through its subsidiaries (collectively, the “Company” or “we”, “us” or
“our”)
operates and 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”).
Forward-LookingForward
Looking Statements:
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 30, 2025. Also, documents subsequently filed by the
Company with the SEC
and incorporated herein by reference may contain forward-looking statements. We caution investors that any forward-looking
statements statements
made by us are not guarantees of future performance and actual results could differ materially from those in the forward-looking
statements statements
as a result of various factors, including but not limited to the following:
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, paper,
labor, health care, workers’ compensation or energy; inadequate number of hourly paid employees; increased wages and salaries
for for
hourly and salaried employees; and/or decreases in the availability of affordable capital resources. We caution the reader that such
risk 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 30, 2025.
Growth Strategies
and Outlook.
We believe there are significant opportunities to grow customer traffic and increase awareness of our brands, leading
to organic sales
growth. We also believe there are unit growth opportunities for both of our concepts though we continue to execute unit
growth with increased
scrutiny surrounding real estate selection and a more conservative approach to leverage than we previously took,
in consideringlight of the higher
costs and volatile inflation present in the current operating environment.
Restaurant locations.Locations.
As of MarchJune 31,30, 2026, we operated, franchised, or licensed a total of thirty-eightthirty-seven Bad Daddy’s restaurants and thirty twenty-eight
Good Times
restaurants. The following table presents the number of restaurants operating at the end of the fiscal quarters ended March 31,June
30, 2026 and
April July 1, 2025.
Company-Owned / Joint-VentureCo-Developed:
*IncludesDoes not include one Good Times restaurant
that is temporarily closed for lease negotiation.closed.
Franchisee Franchise/ LicenseeLicense:
Fiscal quarter
ended March
31,June 30, 2026 (13 weeks) compared to fiscal quarter ended AprilJuly 1, 2025 (13 weeks):
Net Revenues.
Net Net
revenues for the fiscal quarter ended MarchJune 31,30, 2026 decreased $1,047,000$1,858,000 or 3.1%5.0% to $33,232,000$35,167,000 from $34,279,000$37,025,000 for the
fiscal quarter ended April
July 1, 2025. Bad Daddy’s concept revenues decreased $930,000$1,634,000 whileand our Good Times concept revenues decreased $117,000
$224,000 compared to the
same prior-yearprior quarter.year period.
Bad Daddy’s restaurant sales decreased $897,000 to $23,920,000 for the quarter ended March 31, 2026 from $24,817,000 for the quarter ended April 1, 2025. This decrease is primarily due to the fourth fiscal quarter 2025 closure of one Bad Daddy’s restaurant, the first fiscal quarter 2026 closure of one Bad Daddy’s restaurant and decreased guest traffic, partially offset by menu price increases. The average menu price increase for the quarter ended March 31, 2026 over the same prior-year quarter was approximately 0.2%.
GoodBad TimesDaddy’s restaurant sales decreased
$1,624,000 $119,000
to $9,204,000$24,889,000 for the fiscal quarter ended June 30, 2026 from $26,513,000 for the quarter ended March 31, 2026 from $9,323,000 for the quarter ended AprilJuly 1, 2025. This decrease
is drivena by the
current quarter temporary closureresult of onefewer Goodrestaurant Timesoperating restaurant,weeks due to a reduced number of operating restaurants and reduced customer traffic, all of
which are partially offset by increases in menu price.price increases. The average menu price increase
for the fiscal quarter ended MarchJune 31,30, 2026 overwas approximately
2.5% higher than the same prior-yearprior quarteryear was approximately 1.0%.quarter.
Good Times restaurant sales decreased $225,000 to $10,131,000 for the fiscal quarter ended June 30, 2026 from $10,356,000 for the quarter ended July 1, 2025. This decrease is primarily due to the second fiscal quarter 2026 temporary closure of one Good Times restaurant, partially offset by menu price increases. The average menu price for the fiscal quarter ended June 30, 2026 was approximately 1.7% higher than the same prior year quarter.
Franchise and other revenues decreased $31,000 $9,000
to $108,000$147,000 in
for the quarter ended MarchJune 31,30, 2026 compared to $139,000$156,000 infor the quarter ended AprilJuly 1, 2025. This decrease is primarily due
to reduced gift
card breakage.
SalesSame 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-ownedCompany-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.
Bad Daddy’s same store restaurant sales
decreased 0.8%
2.3% during the fiscal quarter ended MarchJune 31,30, 2026 compared to the fiscal quarter ended AprilJuly 1, 2025, primarily driven by discounts
provided provided
through included sides and drink specials along with a decrease in demand across the sector for alcoholic beverages, as well
as reduced
customer traffic, partially offset by menu price increases.increases and increased revenue from new menu items. There were thirty-seven thirty-six
restaurants included in the same store sales base
at the end of the quarter.
Good Times same store restaurant sales decreased 0.8%increased
0.6% during
the quarter ended MarchJune 31,30, 2026 compared to the fiscal quarter ended AprilJuly 1, 2025, primarily driven by promotionalincreased discountscustard along withsales
lost revenue from exited items and category declines, partially offset by a system-wide value menu priceoffering increase.which drove increased traffic late in the quarter. There were twenty-sixtwenty-five restaurants included in
in the same store sales base at the end of the current quarter.
Food
and Packaging Costs.
Food and packaging costs for the fiscal quarter ended MarchJune 31,30, 2026 decreased $649,000$647,000 to $9,828,000 $10,711,000
(29.7%30.6% of restaurant sales) from
$10,477,000 $11,358,000 (30.7%30.8% of restaurant sales) for the quarter ended AprilJuly 1, 2025.
Bad Daddy’s food and packaging costs were $7,092,000
$7,546,000 (29.6%
of restaurant sales) for the quarter ended March 31, 2026, down from $7,619,000 (30.7%30.3% of restaurant sales) for the quarter ended AprilJune 30, 2026, down from $8,100,000 (30.6% of restaurant sales), for the
quarter ended July 1, 2025. The decrease as a percentagepercent of sales is primarily attributable to reduced waste and improved chickennon-beef protein costs combined with
the impact of a 2.5% average increase in menu pricing, partially offset
by higher beefproduce costs and baconfuel purchase prices compared to the prior-year quarter.surcharges.
Good Times
food and packaging costs were $2,736,000$3,165,000 (29.7% of
restaurant sales) for the quarter ended March 31, 2026, down from $2,858,000 (30.7%31.2% of restaurant sales) for the quarter ended AprilJune 30, 2026, down from $3,258,000 (31.5%
of restaurant sales) for the quarter ended July 1,
2025. The decrease as a percentage of sales is primarily attributable
to reduced waste along with the impact of a 1.7% average increase in menu pricing, partially offset by higher beeffuel and bacon prices
compared to the prior-year quarter.surcharges.
Payroll
and Other Employee
Benefit Costs. Payroll and other employee benefit costs for the quarter ended MarchJune 31,30, 2026 decreased $439,000 $945,000
to $11,387,000
$11,702,000 (34.4%33.4% of restaurant sales) from $11,826,000$12,647,000 (34.6%34.3% of restaurant sales) for the quarter ended AprilJuly 1, 2025.
Bad Daddy’s
payroll and other employee benefit costs were
$8,168,000 $8,361,000 (34.1%33.6% of restaurant sales) for the quarter ended MarchJune 31,30, 2026,2026 down from $8,510,000 $9,103,000
(34.3% of restaurant sales) infor the same
prior year period. As a percentage of sales, payroll
and employee benefitsbenefit costs decreased by 0.2%0.7% primarily attributable to lowerreduced employee
benefitsalary costs,costs partially offset by higher averagehourly wagelabor rates.costs.
Good Times
payroll and other employee benefit costs were $3,219,000
$3,341,000 (35.0%33.0% of restaurant sales) in the quarter ended MarchJune 31,30, 2026, down from $3,316,000 $3,544,000
(35.6%34.2% of restaurant sales) in the same prior year
period. As a percentage of sales, payrollthe anddecrease employee benefits costs decreased by 0.6%is primarily attributabledue to increased
labor efficiency,
partially offset by higher average wage rates.rates resulting from a combination of market forces and the inflation-indexed
minimum wage rates in Denver and the state of Colorado.
Occupancy
Costs. Costs.
Occupancy costs for the quarter ended MarchJune 31,30, 2026 decreased $59,000$15,000 to $2,524,000$2,477,000 (7.6%7.1% of restaurant sales) from $2,583,000
$2,492,000 (7.6%
6.8% of restaurant sales) for the quarter ended AprilJuly 1, 2025.
Bad Daddy’s
occupancy costs were $1,625,000$1,578,000 (6.8%6.3% of restaurant
sales) for the fiscal quarter ended MarchJune 31,30, 2026, down from $1,665,000$1,623,000 (6.7%6.1% of restaurant
sales) in the same prior year period. The decrease
was is primarily a result of fewer restaurant operating weeks due to thereduced fourth fiscal quarter 2025 closure of one Bad Daddy’s restaurant and the first fiscal quarter 2026 closurenumber
of oneoperating Bad Daddy’s restaurant.restaurants.
Good
Times occupancy costs were $920,000 (10.0%9.1% of restaurant
sales) infor the quarter ended MarchJune 31,30, 2026, downup from $939,000$890,000 (10.1%8.6% of restaurant
sales) in the same prior year period. This was primarily
due to aan decreaseincrease in property taxes between the quarterly periods.
Other
Operating Costs.
Other operating costs for the quarter ended MarchJune 31,30, 2026, increaseddecreased $33,000$161,000 to $4,951,000$5,069,000 (14.9%14.5% of restaurant
sales) from $4,918,000
5,230,000 (14.4%14.2% of restaurant sales) for the quarter ended AprilJuly 1, 2025.
Bad
Daddy’s other operating costs were $3,739,000$3,809,000 (15.6%
15.3% of restaurant sales) for the quarter ended MarchJune 31,30, 2026,2026 updown from $3,591,000 $3,876,000
(14.5%14.6% of restaurant sales) in the same prior year period.
As a percentage of sales, the increase is primarily due to increases inincreased customer
delivery and travel expenses, partially offset by decreased repair and maintenance expenses.
Good Times other operating costs were $1,400,000 $1,389,000
(15.2%13.7% of restaurant
sales) forin the quarter ended MarchJune 31,30, 2026, down from $1,407,000$1,471,000 (15.1%14.2% of restaurant sales) in the same prior year
period. As a percentage
of sales, the increasedecrease is primarily due to increasesreduced inoperating customersupplies deliveryand expenses.R&M expenses, partially
offset by utility cost increases.
New Store Preopening Costs.
There were no preopening costs in the fiscal quarters ended March 31, 2026 and April 1, 2025 Depreciation and Amortization Costs. Depreciation and amortization costs for the quarter ended March 31, 2026 decreased $118,000 to $878,000 from $996,000 in the quarter ended April 1, 2025.
Bad Daddy’s depreciation and amortization costs for the quarter ended March 31, 2026 decreased $127,000 to $621,000 from $748,000 in the quarter ended April 1, 2025. The decrease is primarily due to assets performing past their estimated usable lives.
Good Times depreciation and amortization costs for the quarter
ended March 31, 2026 increased $8,000 to $246,000 from $238,000 in the quarter ended April 1, 2025.
General and Administrative
Costs. General and administrative costs for the quarter ended March 31, 2026, decreased $382,000 to $2,196,000 (6.6% of total
revenues) from $2,578,000 (7.5% of total revenues) for the quarter ended April 1, 2025.
This decrease in general and administrative expenses for the
quarter ended March 31, 2026 is attributable to:
Advertising Costs.
Advertising costs for the quarter ended March 31, 2026 increased $69,000 to $984,000 (3.0% of total revenues) from $915,000 (2.7% of total
revenues) for the quarter ended April 1, 2025.
Bad Daddy’s advertising costs were $479,000 (2.0% of total
revenues) in the quarter ended March 31, 2026 compared to $494,000 (2.0% of total revenues) in the same prior year period.
Good Times advertising costs were $488,000 (5.3% of total revenues)
in the quarter ended March 31, 2026 compared to $424,000 (4.5% of total revenues) in the same prior year period. The increase is primarily
due to increased advertising campaigns including video streaming, promotional campaigns on third-party delivery platforms, and celebrity
and influencer partnerships, partially offset by reduced radio media. Good Times advertising costs consist primarily of social media,
third-party delivery promotions and video streaming advertising. Advertising costs are presented gross, with franchisee contributions
to the fund being recognized as a component of franchise revenues.
Impairment
of Long-lived Assets and ROU Assets. There were $227,000 of costs
associated with impairments for the quarter ended March 31, 2026. There were $494,000 of
impairment costs for the quarter ended April 1, 2025. The current quarter impairment costs are attributable to the temporary closure of
one Good Times restaurant. Impairment costs in the prior year quarter relate to the impairment of lease right-of-use assets and new assets
deployed in restaurants where impairment was previously assessed, and the Company’s current analysis indicated impairment of assets
associated with those restaurants.
Loss (Gain) on Asset Disposals.
The net loss on asset disposals for the fiscal quarter ended March 31, 2026 was $85,000, which is composed of a loss of $88,000 on disposal
of miscellaneous assets, and $3,000 of deferred gain recognition, compared to a net loss of $6,000 for the fiscal quarter ended April
1, 2025. The net loss in the prior year fiscal quarter was primarily due to disposal of miscellaneous assets, partially offset by deferred
gain recognition.
Income (Loss) from Operations.
Income from operations was $172,000 in the quarter ended March 31, 2026 compared to a loss of $514,000 in the quarter ended April 1, 2025.
The change in the income (loss) from operations for the quarter
ended March 31, 2026 from the quarter ended April 1, 2025 is primarily attributable to matters discussed in the relevant sections above.
Interest Expense. Interest
expense was $36,000 during the quarter ended March 31, 2026 compared with $56,000 during the quarter ended April 1, 2025.
OtherNew Income.Store
Preopening Costs. There was
were no otherpreopening incomecosts forin the quarters ended MarchJune 31,30, 2026 or AprilJuly 1, 2025.
ProvisionDepreciation
and forAmortization IncomeCosts. Taxes.
ThereDepreciation wasand aamortization $23,000 benefit from income taxescosts for the quarter ended MarchJune 31,30, 2026, compareddecreased $65,000 to $57,000$917,000
from of$982,000 expense forin the quarter ended
April July 1, 2025.
Net Income (Loss).
Net income was $159,000 for the quarter ended March 31, 2026 compared to a net loss of $627,000 in the quarter ended April 1, 2025.
The change from the quarter ended March 31, 2026 to the quarter
ended April 1, 2025 was primarily attributable to the matters discussed in the relevant sections above.
Income (Loss) Attributable
to Non-Controlling Interests. The non-controlling interest represents the limited partner’s share of income in the Good
Times joint-venture restaurants.
For the quarter ended March 31, 2026, the income attributable
to non-controlling interests was $10,000 compared to a loss of $3,000 for the quarter ended April 1, 2025. The $13,000 increase is due
to increased profitability of the restaurants involved in the limited partnership with a non-controlling partner.
Fiscal two quarters ended
March 31, 2026 (26 weeks) compared to fiscal two quarters ended April 1, 2025 (27 weeks):
NetBad Revenues.Daddy’s Netdepreciation and amortization
revenuescosts for the two quartersquarter ended MarchJune 31,30, 2026 decreased $4,674,000, or 6.6%,$64,000 to $65,938,000$668,000 from $70,612,000$732,000 forin the twoquarter quarters
ended AprilJuly 1, 2025. BadThe Daddy’sdecrease
is conceptprimarily revenuesdue decreasedto $3,823,000assets andperforming ourpast Goodtheir Timesestimated conceptuseful revenues decreased $851,000.lives.
Good Times depreciation and amortization costs were $240,000 for both the quarters ended June 30, 2026 and July 1, 2025.
General and Administrative Costs. General and administrative costs for the quarter ended June 30, 2026, decreased $188,000 to $1,986,000 (5.6% of total revenues) from 2,174,000 (5.9% of total revenues) for the quarter ended July 1, 2025.
This decrease in general and administrative expenses in the quarter ended June 30, 2026 is primarily attributable to:
Advertising Costs. Advertising costs for the quarter ended June 30, 2026, increased $96,000 to $1,009,000 (2.9% of total revenues) from $913,000 (2.5% of total revenues) for the quarter ended July 1, 2025.
Bad Daddy’s advertising costs were $516,000 (2.1% of total revenues) in the quarter ended June 30, 2026 compared to $542,000 (2.0% of total revenues) in the same prior year period. Bad Daddy’s advertising costs consist primarily of third-party gift card commissions, promotional campaigns on third-party delivery platforms, social media and print production.
Good Times advertising costs were $475,000 (4.7% of total revenues) in the quarter ended June 30, 2026 compared to $382,000 (3.7% of total revenues) in the same prior year period. Good Times advertising costs consist primarily of promotional campaigns on third-party delivery platforms, social media and agency fees. Advertising costs are presented as gross, with franchisee contributions to the fund being recognized as a component of franchise revenues.
Impairment of Long-Lived Assets and ROU Assets. There were $18,000 of costs associated with impairments for the quarter ended June 30, 2026. There were no impairment costs for the quarter ended July 1, 2025. The current quarter impairment costs relate to the right-of-use asset for a Bad Daddy’s location destroyed in a casualty event.
Gain on Lease Terminations and Asset Disposals. The net gain on lease terminations and asset disposals for the fiscal quarter ended June 30, 2026 was $489,000, which includes a gain on lease terminations of $587,000, $3,000 of deferred gain recognition, and a loss of $101,000 on asset disposals, inclusive of the assets disposed resulting from lease terminations. The net gain in the prior year fiscal quarter was $4,000, which was composed of a $13,000 gain on lease termination, $3,000 of deferred gain recognition, and a loss of $12,000 on disposal of miscellaneous assets.
Income from Operations. Income from operations was $1,767,000 in the quarter ended June 30, 2026 compared to income from operations of $1,233,000 in the quarter ended July 1, 2025.
The change from the quarter ended July 1, 2025 to the quarter ended June 30, 2026 was primarily due to matters discussed in the relevant sections above.
GTIM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding GTIM (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 241,426 | $340.4K | 0.0% | Added 8% |