Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 27, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-18590


(Exact Name of Registrant as Specified in Its Charter)
Nevada		84-1133368
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

651 CORPORATE CIRCLE, GOLDEN, CO 80401

(Address of Principal Executive Offices, Including Zip Code)

(303) 384-1400

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $.001 par value	GTIM	NASDAQ Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
	Yes ☒	No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
	Yes ☒	No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
	Yes ☐	No ☒

As of July 25, 2023, there were 11,560,197 shares of the Registrant's common stock, par value $0.001 per share, outstanding.

Table of Contents

Form 10-Q

Quarter Ended June 27, 2023

	INDEX	PAGE

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets (unaudited) – June 27, 2023 and September 27, 2022	3

	Condensed Consolidated Statements of Operations (unaudited) for the fiscal quarters and year-to-date periods ended June 27, 2023 and June 28, 2022	4

	Consolidated Statements of Shareholders’ Equity (unaudited) for the fiscal year-to-date periods ended June 27, 2023 and June 28, 2022	5 - 6

	Condensed Consolidated Statements of Cash Flows (unaudited) for the fiscal year-to-date periods ended June 27, 2023 and June 28, 2022	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	27

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 3.	Defaults Upon Senior Securities	28

Item 4.	Mine Safety Disclosures	28

Item 5.	Other Information	28

Item 6.	Exhibits	29

	SIGNATURES	30

	CERTIFICATIONS

Table of Contents

PART I. - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Good Times Restaurants Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except share and per share data)

	June 27, 2023			September 27, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,684		$	8,906
Receivables		729			694
Prepaid expenses and other		1,414			888
Inventories		1,353			1,387
Total current assets		7,180			11,875
PROPERTY AND EQUIPMENT:
Land and building		4,670			4,670
Leasehold improvements		37,520			35,906
Fixtures and equipment		31,730			30,664
Total property and equipment		73,920			71,240
Less accumulated depreciation and amortization		(52,429	)		(48,989	)
Total net property and equipment		21,491			22,251
OTHER ASSETS:
Operating lease right-of-use assets, net		41,283			42,463
Deferred tax assets		11,398			-
Deposits and other assets		285			166
Trademarks		3,900			3,900
Other intangibles, net		14			20
Goodwill		5,713			5,713
Total other assets		62,593			52,262

TOTAL ASSETS:	$	91,264		$	86,388
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		1,022			628
Deferred income		72			48
Operating lease liabilities, current		5,673			5,430
Other accrued liabilities		6,834			6,791
Total current liabilities		13,601			12,897
LONG-TERM LIABILITIES:
Operating lease liabilities, net of current portion		43,683			45,544
Deferred revenues and other liabilities		137			159
Total long-term liabilities		43,820			45,703
SHAREHOLDERS’&NBSP;EQUITY:
Good Times Restaurants Inc. shareholders’ equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding as of June 27, 2023, and September 27, 2022		-			-
Common stock, $.001 par value; 50,000,000 shares authorized; 12,977,433 issued; 11,622,727 and 12,274,351 outstanding as of June 27, 2023 and September 27, 2022, respectively		13			13
Capital contributed in excess of par value		56,768			59,427
Treasury stock, at cost; 1,354,706 and 692,798 shares as of June 27, 2023, and September 27, 2022, respectively		(4,354	)		(2,634	)
Accumulated deficit		(18,985	)		(30,321	)
Total Good Times Restaurants Inc. shareholders' equity		33,442			26,485

Non-controlling interests		401			1,303
Total shareholders’ equity		33,843			27,788

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	91,264		$	86,388

See accompanying notes to condensed consolidated financial statements (unaudited)

Table of Contents

Good Times Restaurants Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)

(In thousands except share and per share data)

	Quarter Ended (13 Weeks)						Year-to-Date (39 Weeks)
	June 27, 2023			June 28, 2022			June 27, 2023			June 28, 2022
NET REVENUES:
Restaurant sales	$	35,376		$	36,265		$	103,123		$	102,305
Franchise revenues		244			232			676			705
Total net revenues		35,620			36,497			103,799			103,010

RESTAURANT OPERATING COSTS:
Food and packaging costs		10,923			11,767			32,185			32,450
Payroll and other employee benefit costs		11,940			12,295			35,477			35,027
Restaurant occupancy costs		2,432			2,383			7,318			7,088
Other restaurant operating costs		4,811			4,753			14,129			13,558
Preopening costs		80			-			110			50
Depreciation and amortization		919			993			2,740			2,990
Total restaurant operating costs		31,105			32,191			91,959			91,163

General and administrative costs		2,365			2,384			7,040			7,677
Advertising costs		751			807			2,423			2,260
Impairment of long-lived assets		965			303			1,041			2,056
Gain on restaurant asset sale and lease termination		(10	)		(9	)		(32	)		(666	)
Litigation contingencies		-			-			-			332

INCOME FROM OPERATIONS:		444			821			1,368			188

Interest and other expense, net		(18	)		(12	)		(56	)		(41	)

NET INCOME BEFORE INCOME TAXES:		426			809			1,312			147

Provision for income taxes		551			(1	)		10,503			(9	)

NET INCOME:	$	977		$	808		$	11,815		$	138

Income attributable to non-controlling interests		(135	)		(339	)		(479	)		(1,489	)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	842		$	469		$	11,336		$	(1,351	)

NET INCOME (LOSS) PER COMMON SHARE:
Basic	$	0.07		$	0.04		$	0.96		$	(0.11	)
Diluted	$	0.07		$	0.04		$	0.95		$	(0.11	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		11,700,044			12,457,251			11,853,441			12,502,449
Diluted		11,769,286			12,560,658			11,910,491			12,502,449

See accompanying notes to condensed consolidated financial statements (unaudited)

Table of Contents

Good Times Restaurants Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity (Unaudited)
Year-to-Date June 27, 2023

(In thousands, except share and per share data)

	Treasury Stock, at cost					Common Stock
	Shares		Amount			Outstanding Shares			Par Value		Capital Contributed in Excess of Par Value			Non- Controlling Interest In Partnerships			Accumulated Deficit			Total

BALANCES, September 27, 2022		692,798	$	(2,634	)		12,274,351		$	13	$	59,427		$	1,303		$	(30,321	)	$	27,788

Stock-based compensation cost		-		-			-			-		46			-			-			46
Restricted stock unit vesting		-		-			8,284			-		(92	)		-			-			(92	)
Stock Option Exercise		-		-			2,000			-		5			-			-			5
Repurchases of common stock		371,395		(873	)		(371,395	)		-		-			-			-			(873	)
Non-controlling interests:
Income		-		-			-			-		-			222			-			222
Distributions		-		-			-			-		-			(172	)		-			(172	)
Contributions		-		-			-			-		-			13			-			13
Net Income attributable to common shareholders and comprehensive income		-		-			-			-		-			-			(127	)		(127	)

BALANCES, December 27, 2022		1,064,193	$	(3,507	)		11,913,240		$	13	$	59,386		$	1,366		$	(30,448	)	$	26,810

Stock-based compensation cost		-		-			-			-		43			-			-			43
Repurchases of common stock		166,890		(467	)		(166,890	)		-		-			-			-			(467	)
Non-controlling interests:
Income		-		-			-			-		-			122			-			122
Distributions		-		-			-			-		-			(294	)		-			(294	)
Purchase of non-controlling interests		-		-			-			-		(2,675	)		(831	)		-			(3,506	)
Net Income attributable to common shareholders and comprehensive income		-		-			-			-		-			-			10,621			10,621

BALANCES, March 28, 2023		1,231,083	$	(3,974	)		11,746,350		$	13	$	56,754		$	363		$	(19,827	)	$	33,329

Stock-based compensation cost		-		-			-			-		14			-			-			14
Repurchases of common stock		123,623		(380	)		(123,623	)		-		-			-			-			(380	)
Non-controlling interests:
Income		-		-			-			-		-			135			-			135
Distributions		-		-			-			-		-			(97	)		-			(97	)
Net Income attributable to common shareholders and comprehensive income		-		-			-			-		-			-			842			842

BALANCES, June 27, 2023		1,354,706	$	(4,354	)		11,622,727		$	13	$	56,768		$	401		$	(18,985	)	$	33,843

See accompanying notes to consolidated financial statements (unaudited)

Table of Contents

Good Times Restaurants Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity (Unaudited)
Year-to-Date June 28, 2022

(In thousands, except share and per share data)

	Treasury Stock, at cost					Common Stock
	Shares		Amount			Issued Shares			Par Value		Capital Contributed in Excess of Par Value		Non- Controlling Interest In Partnerships			Accumulated Deficit			Total

BALANCES, September 28, 2021		376,351	$	(1,608	)		12,512,072		$	13	$	59,021	$	1,124		$	(27,680	)	$	30,870

Stock-based compensation cost		-		-			-			-		95		-			-			95
Restricted stock unit vesting		-		-			13,366			-		-		-			-			-
Common stock grants		-		-			9,256			-		-		-			-			-
Stock option exercise		-		-			5,000			-		6		-			-			6
Non-controlling interests:
Income		-		-			-			-		-		920			-			920
Distributions		-		-			-			-		-		(632	)		-			(632	)
Net Income attributable to common shareholders and comprehensive income		-		-			-			-		-		-			330			330

BALANCES, December 28, 2021		376,351	$	(1,608	)		12,539,694		$	13	$	59,122	$	1,412		$	(27,350	)	$	31,589

Stock-based compensation cost		-		-			-			-		52		-			-			52
Restricted stock unit vesting		-		-			-			-		-		-			-			-
Stock option exercise		-		-			23,797			-		84		-			-			84
Repurchases of common stock		75,900		(331	)		(75,900	)		-		-		-			-			(331	)
Non-controlling interests:
Income		-		-			-			-		-		230			-			230
Distributions		-		-			-			-		-		(112	)		-			(112	)
Net Loss attributable to common shareholders and comprehensive loss		-		-			-			-		-		-			(2,150	)		(2,150	)

BALANCES, March 29, 2022		452,251	$	(1,939	)		12,487,591		$	13	$	59,258	$	1,530		$	(29,500	)	$	29,362

Stock-based compensation cost		-		-			-			-		60		-			-			60
Repurchases of common stock		93,748		(274	)		(93,748	)		-		-		-			-			(274	)
Non-controlling interests:
Income		-		-			-			-		-		339			-			339
Distributions		-		-			-			-		-		(493	)		-			(493	)
Net Income attributable to common shareholders and comprehensive income		-		-			-			-		-		-			469			469

BALANCES, June 28, 2022		545,999	$	(2,213	)		12,393,843		$	13	$	59,318	$	1,376		$	(29,031	)	$	29,463

See accompanying notes to consolidated financial statements (unaudited)

Table of Contents

Good Times Restaurants Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

	Fiscal Year to Date (39 Weeks)
	June 27, 2023			June 28, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	11,815		$	138

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,809			3,129
Impairment of long-lived assets		1,041			2,056
Stock-based compensation expense		103			207
Loss (gain) on lease termination and disposal of assets		44			(642	)
Recognition of deferred gain on sale of restaurant building		(76	)		(24	)
Deferred income taxes		(10,510	)		9
Changes in operating assets and liabilities:
Receivables and other		(35	)		(18	)
Prepaid expense		(526	)		(742	)
Inventories		34			(62	)
Deposits and other		(119	)		70
Accounts payable		444			(529	)
Net change in ROU assets and operating lease liabilities		(438	)		(297	)
Accrued and other liabilities		121			1,123
Net cash provided by operating activities		4,707			4,418

CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the purchase of property and equipment		(3,178	)		(1,623	)
Acquisition of restaurant from franchisee, net of cash acquired		-			(728	)
Proceeds from sale of fixed assets		-			745
Purchase of non-controlling interests		(4,394	)		-
Net cash used in investing activities		(7,572	)		(1,606	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment for the purchase of treasury stock		(1,720	)		(605	)
Restricted stock vesting settled in cash		(92	)		-
Proceeds from stock option exercise		5			90
Distributions to non-controlling interests		(563	)		(1,449	)
Contributions from non-controlling interests		13			-
Net cash used in financing activities		(2,357	)		(1,964	)

NET CHANGE IN CASH AND CASH EQUIVALENTS		(5,222	)		848

CASH AND CASH EQUIVALENTS, beginning of period		8,906			8,856

CASH AND CASH EQUIVALENTS, end of period	$	3,684		$	9,704

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	15		$	14
Change in accounts payable attributable to the purchase of property and equipment	$	(50	)	$	(214	)

See accompanying notes to condensed consolidated financial statements (Unaudited)

Table of Contents

GOOD TIMES RESTAURANTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Tabular dollar amounts in thousands, except share and per share data)

Note 1.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Good Times Restaurants Inc. (the “Company”) and its wholly owned subsidiaries as well as one partnership in which the Company is the general partner, and five limited liability companies in which the Company was the controlling member during the period of time in which unrelated parties owned membership interests in those limited liability companies. Those memberships were acquired by the Company in January 2023. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company operates and licenses full-service restaurants under the brand Bad Daddy’s Burger Bar that are primarily located in Colorado and in the Southeast region of the United States.

The Company operates and franchises drive-thru fast-food hamburger restaurants under the brand Good Times Burgers & Frozen Custard, all of which are located in Colorado and Wyoming.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles and practices of the United States of America (“GAAP”) for interim financial information. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position of the Company as of June 27, 2023 and the results of its operations and its cash flows for the fiscal quarters ended June 27, 2023 and June 28, 2022. Operating results for the fiscal quarter ended June 27, 2023 are not necessarily indicative of the results that may be expected for the year ending September 26, 2023. The condensed consolidated balance sheet as of September 27, 2022 is derived from the audited financial statements but does not include all disclosures required by generally accepted accounting principles. As a result, these condensed consolidated financial statements should be read in conjunction with the Company's Form 10-K for the fiscal year ended September 27, 2022.

Fiscal Year – 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 consist of 13 weeks. The additional week in a 53-week fiscal year is added to the first quarter, making such quarter consist of 14 weeks. The quarters ended June 27, 2023 and June 28, 2022 each consisted of 13 weeks.

Reclassification – Certain prior year balances have been reclassified to conform to the current year’s presentation. Such reclassifications had no effect on the net income.

Advertising Costs – The company utilizes Advertising Funds to administer certain advertising programs for both the Bad Daddy’s and Good Times brands that benefit both us and our franchisees. We and our franchisees are required to contribute a percentage of gross sales to the fund. The contributions to these funds are designated and segregated for advertising. We consolidate the Advertising Funds into our financial statements whereby contributions from franchisees, when received, are recorded and included as a component of franchise revenues. Contributions to the Advertising Funds from our franchisees were $212,000 and $204,000 for the three quarters ended June 27, 2023 and June 28, 2022, respectively.

Receivables – Our receivables typically consist of royalties and other fees due to us from independent franchisees of our brands as well as product rebates and other incentives due to us under agreements with our food and beverage vendors, and payments due to us for sales of gift cards to third party retailers. As of June 27, 2023, total receivables were $729,000, which consists of $84,000 in receivables from large box retail partners, $291,000 in rebate receivables, $298,000 in receivables from delivery and online ordering partners, and $56,000 of franchise and other receivables, compared to $694,000 as of the fiscal year ended June 28, 2022, consisting of $235,000 in receivables from large box retail partners, $127,000 in rebate receivables, $229,000 in receivables from delivery and online ordering partners, and $103,000 of franchise and other receivables.

Note 2.

Recent Accounting Pronouncements

The Company reviewed all recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on the Company’s consolidated financial statements.

Note 3.

Revenue

Revenue Recognition

Revenues consist primarily of sales from restaurant operations and franchise revenue, which includes franchisee contributions to advertising funds. Revenues associated with gift card breakage are immaterial to our financials. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer, typically a restaurant customer or a franchisee/licensee.

Table of Contents

The Company recognizes revenues in the form of restaurant sales at the time of the sale when payment is made by the customer, as the Company has completed its performance obligation, namely the provision of food and beverage, and the accompanying customer service, during the customer’s visit to the restaurant. The Company sells gift cards to customers and recognizes revenue from gift cards primarily in the form of restaurant revenue. Gift card breakage, which is recognized when the likelihood of a gift card being redeemed is remote, is determined based upon the Company’s historic redemption patterns, and is immaterial to our overall financial statements.

Revenues we receive from our franchise and license agreements include sales-based royalties, and from our franchise agreements also may include advertising fund contributions, area development fees, and franchisee fees. We recognize sales-based royalties from franchisees and licensees as the underlying sales occur. We similarly recognize advertising fund contributions from franchisees as the underlying sales occur. The Company also provides its franchisees with services associated with opening new restaurants and operating them under franchise and development agreements in exchange for area development and franchise fees. The Company would capitalize these fees upon receipt from the franchisee and then would amortize those over the contracted franchise term as the services comprising the performance obligations are satisfied. We have not received material development or franchise fees in the years presented, and the primary performance obligations under existing franchise and development agreements have been satisfied prior to the earliest period presented in our financial statements.

Note 4.

Goodwill and Intangible Assets

The following table presents goodwill and intangible assets as of June 27, 2023 and September 27, 2022 (in thousands):

	June 27, 2023							September 27, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets subject to amortization:
Non-compete agreements	$	25	$	(11	)	$	14	$	25	$	(5	)	$	20
Indefinite-lived intangible assets:
Trademarks		3,900		-			3,900		3,900		-			3,900
Intangible assets, net	$	3,925	$	(11	)	$	3,914	$	3,925	$	(5	)	$	3,920

Goodwill	$	5,713	$	-		$	5,713	$	5,713	$	-		$	5,713

Goodwill represents the excess of cost over fair value of the assets of businesses the Company acquired. Goodwill is not amortized, but rather, the Company is required to test goodwill for impairment on an annual basis or whenever indications of impairment arise. The Company considers its operations to be comprised of two reporting units: (1) Good Times restaurants and (2) Bad Daddy’s restaurants. The Company had no goodwill impairment losses in the periods presented in the above table. The aggregate amortization expense related to these intangible assets subject to amortization was $6,000 for the three quarters ended June 27, 2023 and $3,000 for the three quarters ended June 28, 2022. As of both June 27, 2023 and June 28, 2022, the Company had $96,000 of goodwill attributable to the Good Times reporting unit and $5,617,000 of goodwill attributable to its Bad Daddy’s reporting unit.

Note 5.

Stock-Based Compensation

The Company has traditionally maintained incentive compensation plans that include provision for the issuance of equity-based awards. The Company established the 2008 Omnibus Equity Incentive Compensation Plan in 2008 (the “2008 Plan”) and has outstanding awards that were issued under the 2008 Plan. Subsequently, the 2008 Plan expired in 2018 and the Company established a new plan, the 2018 Omnibus Equity Incentive Plan (the “2018 Plan”) during the 2018 fiscal year, which was approved by shareholders on May 24, 2018. Future awards will be issued under the 2018 Plan. On February 8, 2022 the Company’s shareholders approved a proposal to increase the number of shares available for issuance under the 2018 Plan from 900,000 to 1,050,000, which currently represents the maximum number of shares available for issuance under the 2018 Plan.

Stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the grant). The Company recognizes the impact of forfeitures as forfeitures occur.

Our net income for the three quarters ended June 27, 2023 and June 28, 2022 includes $104,000 and $207,000, respectively, of compensation costs related to our stock-based compensation arrangements.

Table of Contents

Stock option awards

The Company measures the compensation cost associated with stock option awards by estimating the fair value of the award as of the grant date using the Black-Scholes pricing model. The Company believes this valuation method and the approach used to develop the underlying assumptions are appropriate in calculating the fair values of the stock options awards granted during the three quarters ended June 27, 2023. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive awards.

In addition to the exercise and grant date prices of the stock option awards, certain weighted average assumptions that were used to estimate the fair value of stock option grants are listed in the following table:

	Three Quarters Ended June 27, 2023 Incentive and Non-Qualified Stock Options			Three Quarters Ended June 28, 2022 Incentive and Non-Qualified Stock Options

Expected term (years)		7.5			6.5
Expected volatility	60.0%	-	60.2%		61.31%
Risk-free interest rate	3.33%	-	4.21%		1.76%
Expected dividends		-			-

We estimate expected volatility based on historical weekly price changes of our common stock for a period equal to the current expected term of the options. The risk-free interest rate is based on United States treasury yields effective at the time of grant corresponding to the expected term of the options. The expected term is the number of years we estimate that options will be outstanding prior to exercise considering vesting schedules and historic exercise patterns.

The following table summarizes stock option activity for the three quarters ended June 27, 2023 under all plans:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Yrs)

Outstanding at beginning of year		470,161		$	3.97
Options granted		45,000		$	2.81
Options exercised		(2,000	)	$	2.31
Options Forfeited		(64,137	)	$	3.43
Outstanding June 27, 2023		449,024		$	3.94		5.0
Exercisable June 27, 2023		334,103		$	3.66		4.6

As of June 27, 2023, the aggregate intrinsic value of exercisable options was $296,000. Only options whose exercise price is below the current market price of the underlying stock are included in the intrinsic value calculation.

As of June 27, 2023, the total remaining unrecognized compensation cost related to non-vested stock options was $104,000 and is expected to be recognized over a weighted average period of approximately 1.9 years.

There were 45,000 stock options awarded during the three quarters ended June 27, 2023.

During the three quarters ended June 28, 2022, the Company granted 105,000 stock options, which includes 25,000 non-qualified stock options to its Senior Vice President of Finance pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market Listing Rules as an inducement to employment. Prior to the end of the quarter ended June 27, 2023, these stock options were forfeited due to the officer’s employment separation.

There were 2,000 stock options exercised resulting in the issuance of 2,000 shares during the three quarters ended June 27, 2023 with proceeds of approximately $5,000. There were 28,797 stock options exercised during the three quarters ended June 28, 2022 with proceeds of approximately $90,000.

Restricted Stock Units

There were 25,750 restricted stock units granted during the three quarters ended June 27, 2023 and there were 28,000 restricted stock units granted during the three quarters ended June 28, 2022.

Table of Contents

A summary of the status of non-vested restricted stock units as of June 27, 2023 is presented below.

	Shares			Grant Date Fair Value Per Share
Non-vested units at beginning of year		73,336		$1.54	to	$4.50
Units granted		25,750			$2.29
Units vested		(46,336	)		$1.54
Units forfeited		(2,750	)	$2.29	to	$4.50
Non-vested units at June 27, 2023		50,000		$2.29	to	$4.50

As of June 27, 2023, there was $106,000 of total unrecognized compensation cost related to non-vested restricted stock units. This cost is expected to be recognized over a weighted average period of approximately 1.9 years.

Restricted and Unrestricted Common Stock Awards

No grants of restricted or unrestricted common stock were made during the three quarters ended June 27, 2023. During the three quarters ended June 28, 2022 there were 9,256 unrestricted shares of common stock granted to directors of the Company. These shares had a grant date fair value of $4.35 per share and resulted in the recognition of $40,000 of stock-based compensation expense.

Note 6.

Gain on Sale of Assets and Lease Termination

For the three fiscal quarters ended June 27, 2023, the Company recognized $76,000 of deferred gains on prior sale-leaseback transactions related to certain Good Times restaurants and $44,000 of net loss on disposal of miscellaneous assets. During the three fiscal quarters ended June 28, 2022 we recognized a $642,000 gain in connection with a landlord’s exercising a lease termination option for one Good Times restaurant and we also recognized $7,000 in deferred gain on prior sale-leaseback transactions related to certain Good Times restaurants.

Note 7.

Prepaid expense and other current assets

Prepaid expenses and other current assets consist of the following as of:

	June 27, 2023		September 27, 2022
Prepaid Rent	$	779	$	765
Prepaid Insurance		382		3
Other		253		120
Total	$	1,414	$	888

Note 8.

Other Accrued Liabilities

Other accrued liabilities consist of the following as of:

	June 27, 2023		September 27, 2022
Wages and other employee benefits	$	3,116	$	2,773
Taxes, other than income taxes		1,215		1,166
Gift card liability, net of breakage		1,229		985
General expense accrual and other		1,274		1,867
Total	$	6,834	$	6,791

Note 9.

Notes Payable and Long-Term Debt

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.

Table of Contents

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%.

Note 10.

Net Income (Loss) per Common Share

Our basic earnings per share calculation is computed based on the weighted-average number of common shares outstanding. Our diluted earnings per share calculation is computed based on the weighted-average number of common shares outstanding adjusted by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive securities for this calculation consist of in-the-money outstanding stock options, restricted stock units and warrants (which were assumed to have been exercised at the average market price of the common shares during the reporting period). The treasury stock method is used to measure the dilutive impact of in-the-money stock options.

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding:

	Quarter Ended				Year-to-Date
	June 27, 2023		June 28, 2022		June 27, 2023		June 28, 2022
Weighted-average shares outstanding basic		11,700,044		12,457,251		11,853,441		12,502,449
Effect of potentially dilutive securities:
Stock options		19,242		29,071		7,050		-
Restricted stock units		50,000		74,336		50,000		-
Weighted-average shares outstanding diluted		11,769,286		12,560,658		11,910,491		12,502,449
Excluded from diluted weighted average shares outstanding:
Antidilutive		345,691		387,378		354,024		249,752

Note 11.

Contingent Liabilities and Liquidity

The failure of banks where we maintain deposits in excess of the limits insured by FDIC or other government or quasi-government agencies could materially affect our financial position and operating results.

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.

There may be various claims in process, matters in litigation, and other contingencies brought against the company by employees, vendors, customers, franchisees, or other parties. Evaluating these contingencies is a complex process that may involve substantial judgment on the potential outcome of such matters, and the ultimate outcome of such contingencies may differ from our current analysis. We regularly review the adequacy of accruals and disclosures related to such contingent liabilities in consultation with legal counsel. While it is not possible to predict the outcome of these claims with certainty, subject to our disclosure immediately below, it is management’s opinion that any reasonably possible losses associated with such contingencies would be immaterial to our financial statements.

Table of Contents

The Company is the defendant in a lawsuit styled as White Winston Select Asset Funds, LLC and GT Acquisition Group, Inc. v. Good Times Restaurants, Inc., arising from the failed negotiations between plaintiffs and the Company for the sale of the Good Times Drive Thru subsidiary to plaintiffs. The lawsuit was initially filed on September 24, 2019 in Delaware Chancery Court, and Company removed the case to federal court in the US District Court for the District of Delaware on November 5, 2019. On July 30, 2021, the plaintiffs moved the Court for leave to amend their complaint and add new causes of action and a claim for $18 million in damages. On April 11, 2022, the Court heard the parties’ respective motions for summary judgment on the plaintiffs’ claims. The Court verbally ruled that it was dismissing all of the plaintiffs’ claims except for their claim for breach of an express and implied obligation to negotiate in good faith under the parties’ letter of intent. The Court also indicated its intent to dismiss Good Times’s counterclaim against the plaintiffs for breach of a covenant not to sue over the failed negotiations. On May 5, 2022, the Court issued a written order confirming this ruling. On May 25, 2022, the Court issued an order that the plaintiffs are only entitled to reliance damages should they prevail on their claim for breaches of the express and implied obligations to negotiate in good faith. The parties conducted a bench trial on the plaintiffs’ claims. The parties concluded post-trial briefing on October 24, 2022. On January 25, 2023, the Court rendered judgment dismissing the plaintiffs’ claims in their entirety and denying all of the requested relief.

The plaintiffs filed a notice of appeal of the Court’s January 25, 2023 decisions. Good Times, in turn, filed a notice of appeal of the Court’s previous dismissal of its counterclaim against the plaintiffs. The parties are now conducting appellate briefing. On May 18, 2023, the plaintiffs filed their opening brief. On June 23, 2023, Good Times filed its brief in response to the plaintiffs’ opening brief and Good Times’s own opening brief regarding its appeal of the dismissal of its counterclaims against the plaintiffs. The plaintiffs’ deadline for the reply brief in support of their appeal and response to Good Times’s appeal is August 7, 2023. Good Times’s deadline to file a reply brief in support of its appeal is August 28, 2023. At that time, briefing will be closed, and the court of appeals may render a decision at any time.

The Company previously recorded an accrual for contingent litigation expense in the fiscal quarter ended March 28, 2022 in the amount of $332,000. This amount represented the Company’s best estimate of the likely amount of plaintiffs’ damage recovery. While the Company was successful at trial, in light of plaintiff’s appeal, the Company has determined to maintain the accrual and will continue to evaluate this matter based on new information as it becomes available. The ultimate resolution of the case could result in losses less than or in excess of amounts accrued. Any additional liability in excess of the accrual could have a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which any such additional liability is accrued. The Company will continue to vigorously pursue a full defense of this matter on the merits.

Note 12.

Leases

The Company determines if a contract contains a lease at inception. The Company's material long-term operating lease agreements are for the land and buildings for our restaurants as well as our corporate office. The initial lease terms range from 10 years to 20 years, most of which include renewal options of 10 to 15 years. The lease term is generally the minimum of the non-cancelable period or the lease term including the renewal options which are reasonably certain of being exercised up to a term of approximately 20 years. The Company reassesses the number of remaining renewal options to include in a lease term for a specific lease when it exercises an option to extend such lease.

Operating lease assets and liabilities are recognized at the lease commencement date for material leases with a term of greater than 12 months. Operating lease liabilities represent the present value of future minimum lease payments. Since our leases do not provide an implicit rate, our operating lease liabilities are calculated using our estimated incremental borrowing rate based on a collateralized borrowing over the term of each individual lease. Minimum lease payments include only fixed lease components of the agreement, as well as variable rate payments that depend on an index, initially measured using the index at the lease commencement date.

Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepaid or accrued lease payments, initial direct costs and lease incentives. Lease incentives are recognized when earned and reduce our operating lease asset related to the lease. They are amortized through the operating lease assets as reductions of rent expense over the lease term.

Operating lease expense is recognized on a straight-line basis over the lease term. Certain of the Company’s operating leases contain clauses that provide for contingent rent based on a percentage of sales greater than certain specified target amounts. Variable lease payments that do not depend on a rate or index, escalation in the index subsequent to the initial measurement, payments associated with non-lease components such as common area maintenance, real estate taxes and insurance, and short-term lease payments (leases with a term with 12 months or less) are expensed as incurred or when the achievement of the specified target that triggers the contingent rent is considered probable.

Some of the leases provide for base rent, plus additional rent based on gross sales, as defined in each lease agreement. The Company is also generally obligated to pay certain real estate taxes, insurance and common area maintenance charges, and various other expenses related to properties, which are expensed as incurred.

Table of Contents

Components of operating lease costs are as follows for the fiscal quarters ended June 27, 2023 and June 28, 2022:

Lease cost	Classification	June 27, 2023			June 28, 2022
Operating lease cost	Occupancy, Other restaurant operating costs and General and administrative expenses, net	$	1,824		$	1,866
Variable lease cost	Occupancy		60			27
Sublease income	Occupancy		(137	)		(136	)
		$	1,747		$	1,757

Weighted average lease term and discount rate are as follows:

	June 27, 2023			June 28, 2022
Weighted average remaining lease term (in years)		8.16			8.85

Weighted average discount rate		5.0	%		5.0	%

Supplemental cash flow disclosures for the three fiscal quarters ended June 27, 2023:

	June 27, 2023		June 28, 2022
Cash paid for operating lease liabilities	$	5,771	$	5,383

Non-cash operating lease assets obtained in exchange for operating lease liabilities	$	1,201	$	734

Supplemental balance sheet disclosures:

		June 27, 2023		September 27, 2022
Right-of-use assets	Operating lease assets	$	41,283	$	42,463

Current lease liabilities	Operating lease liability	$	5,673	$	5,430
Non-current lease liabilities	Operating lease liability, less current portion		43,683		45,544
Total lease liabilities		$	49,356	$	50,974

Future minimum rent payments for our operating leases for each of the next five years as of June 27, 2023 are as follows:

Fiscal year ending:	Total
Remainder of 2023	$	1,986
2024		7,983
2025		8,081
2026		7,665
2027		7,368
Thereafter		27,413
Total minimum lease payments		60,496
Less: imputed interest		(11,140	)
Present value of lease liabilities	$	49,356

The above future minimum rental amounts exclude the amortization of deferred lease incentives, renewal options that are not reasonably assured of renewal, and contingent rent. The Company generally has escalating rents over the term of the leases and records rent expense on a straight-line basis.

Note 13.

Impairment of Long-Lived Assets and Trademarks

Long-Lived Assets. We review our long-lived assets including land, property, and equipment for impairment when there are factors that indicate that the carrying amount of an asset may not be recoverable. We assess recovery of assets at the individual restaurant level and typically include an analysis of historical cash flows, future operating plans, and cash flow projections in assessing whether there are indicators of impairment. The recoverability of assets to be held and used is measured by comparing the net book value of the assets of an individual restaurant to the fair value of those assets. This impairment process involves significant judgment in the use of estimates and assumptions pertaining to future projections and operating results.

Table of Contents

During the quarter ended June 27, 2023 there were no impairments of long-lived assets recorded. There were $1,041,000 of asset impairments in the three quarters ended June 27, 2023, related primarily to the assets of one Bad Daddy’s restaurant in the Atlanta, Georgia market, and to a much lesser extent to 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 the three quarters ended June 28, 2022, we recognized $303,000 in impairment cost related to one Good Times restaurant. For the three quarters ended June 28, 2022, we recognized $2,056,000 in total asset impairments for four restaurants. Of this amount, $790,000 was related to three Good Times restaurants and $1,266,000 was related to one Bad Daddy’s restaurant.

Trademarks. Trademarks have been determined to have an indefinite life. We evaluate trademarks for impairment annually and on an interim basis as circumstances warrant by comparing their fair value with their carrying amount. There was no impairment to the acquired trademarks as of June 27, 2023 and June 28, 2022.

Note 14.

Income Taxes

We account for income taxes using the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. Deferred tax assets are reviewed periodically for realizability and valuation allowances are adjusted as necessary.

The Company’s effective income tax rate for the three months ended June 27, 2023 was (189.98%), a decrease from an effective income tax rate of (0.21%) for the three months ended June 28, 2022. The decrease is due to the release of the Company’s valuation allowance during the second quarter that has been adjusted during the third quarter as a result of a change in the Company’s forecast for the year. The Company’s effective income tax rate for the three quarters ended June 27, 2023 was (1,261.02%), a decrease from an effective income tax rate of (0.7%) for the three quarters ended June 28, 2022. The decrease is also attributed to the release of the Company’s valuation allowance and the forecast adjustments that occurred during the second and third quarters, respectively.

During the second quarter of this fiscal year, the Company entered into a transaction in which it purchased the non-controlling interests in several joint ventures that have historically collectively generated significant income. Due to this transaction and a recent history of cumulative earnings, management believes the Company is now in a position to realize its tax benefits beginning in the current year, as well as in future years, and as such, has released the full valuation allowance recorded.

The Company is subject to taxation in various jurisdictions within the U.S. The Company continues to remain subject to examination by U.S. federal authorities for the years 2020 through 2023. The Company believes that its income tax filing positions and deductions will be sustained upon audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. No accrual for interest and penalties was considered necessary as of June 27, 2023.

Note 15.

Non-controlling Interests

Non-controlling interests are presented separately in the shareholders’ equity section of the condensed consolidated balance sheet. The amount of consolidated net income or loss attributable to non-controlling interests is presented on the face of the condensed consolidated statement of operations. Changes in a parent’s ownership interest in a subsidiary not resulting in deconsolidation are equity transactions, while changes in ownership interest that do result in deconsolidation of a subsidiary require gain or loss recognition based on the fair value on the deconsolidation date.

The equity interests of the unrelated limited partners and non-controlling members are shown on the accompanying consolidated balance sheet in the shareholders’ equity section as a non-controlling interest and is adjusted each period to reflect the limited partners’ and non-controlling members’ share of the net income or loss as well as any cash contributions or distributions to or from the limited partners and non-controlling members for the period. The limited partners’ and members’ share of the net income or loss in the subsidiary is shown as income or expense attributable to non-controlling interests in the accompanying consolidated statement of operations. All inter-company accounts and transactions are eliminated.

The following table summarizes the activity in non-controlling interests during the three quarters ended June 27, 2023 (in thousands):

	Bad Daddy’s			Good Times			Total
Balance at September 27, 2022	$	1,041		$	262		$	1,303
Income		219			260			479
Purchase of Non-controlling Interests		(831	)		-			(831	)
Distributions		(442	)		(121	)		(563	)
Contribution		13			-			13
Balance at June 27, 2023		-			401			401

Table of Contents

Non-controlling interests at the end of the quarter consisted of one limited liability partnership, currently involving six Good Times restaurants, of which the Company is the general partner. During the fiscal quarter ended March 28, 2023, the Company acquired all of the non-controlling membership interests in all outstanding limited liability companies, which included five total Bad Daddy’s restaurants. The aggregate purchase price paid to the sellers was $4,394,000.

Note 16.

Segment Reporting

All of our Bad Daddy’s Burger Bar restaurants (Bad Daddy’s) compete in the full-service segment of the restaurant industry while our Good Times Burgers and Frozen Custard restaurants (Good Times) compete in the quick-service segment of the dining industry. We believe that providing this additional financial information for each of our brands will provide a better understanding of our overall operating results. Income from operations represents revenues less restaurant operating costs and expenses, directly allocable general and administrative expenses, and other restaurant-level expenses directly associated with each brand including depreciation and amortization, pre-opening costs and losses or gains on disposal of property and equipment. Unallocated corporate capital expenditures are presented below as reconciling items to the amounts presented in the consolidated financial statements.

The following tables present information about our reportable segments for the respective periods (in thousands):

	Quarter Ended (13 Weeks)					Year-to-Date (39 Weeks)
	June 27, 2023			June 28, 2022		June 27, 2023			June 28, 2022
Revenues
Bad Daddy’s	$	26,161		$	27,231	$	77,795		$	77,427
Good Times		9,459			9,266		26,004			25,583
	$	35,620			36,497	$	103,799			103,010
Income from operations
Bad Daddy’s	$	(946	)		635	$	(277	)		138
Good Times	$	1,390			186	$	1,645			50
	$	444			821	$	1,368			188
Capital expenditures
Bad Daddy’s	$	1,295			652	$	1,901			1,480
Good Times		302			364		1,277			471
	$	1,597		$	1,016	$	3,178		$	1,951

	June 27, 2023		September 27, 2022
Property and equipment, net
Bad Daddy’s	$	18,048	$	19,575
Good Times		3,443		2,676
	$	21,491	$	22,251

Note 17.

Subsequent Events

None.

Table of Contents

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

Table of Contents

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				Good Times Burgers & Frozen Custard				Total
	2023		2022		2023		2022		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				Good Times Burgers & Frozen Custard				Total
	2023		2022		2023		2022		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				Good Times Burgers & Frozen Custard				Total
	2023		2022		2023		2022		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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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.

Table of Contents

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.

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.

Table of Contents

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.

Table of Contents

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

	Quarter Ended (13 Weeks)						Year-to-Date (39 Weeks)
	June 27, 2023			June 28, 2022			June 27, 2023			June 28, 2022
Adjusted EBITDA:
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

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.

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.

Table of Contents

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.

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

Table of Contents

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.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4.

CONTROLS AND PROCEDURES

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.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

For a discussion of material legal proceedings affecting the Company, see Note 11 to the unaudited condensed consolidated financial statements included in this report.

ITEM 1A.

RISK FACTORS

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.

Table of Contents

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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 actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. As of June 27, 2023 the Company has purchased 951,048 shares of its common stock pursuant to the share repurchase plan leaving approximately $2,326,000 available for repurchases under the plan.

Repurchases of common stock under the share repurchase plan during the fiscal quarter ended June 27, 2023 were as follows:

Period	Total number of shares (or units) purchased		Average price paid per share (or unit)		Total number of shares (or units) purchased as part of publicly announced plans or programs		Maximum dollar value of shares that may yet be purchased under the plans or programs
3/29/2023 – 4/25/2023		21,879	$	2.76		21,879
4/26/2023 – 5/23/2023		32,707	$	2.82		32,707
5/24/2023 – 6/27/2023		69,037	$	3.17		69,037
Total		123,623				123,623	$	2,326,000

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

None.

Table of Contents

ITEM 6.

EXHIBITS

(a) Exhibits. The following exhibits are furnished as part of this report:

Exhibit No.	Description
3.1	Amended and Restated Bylaws of Good Times Restaurants Inc., effective April 20, 2023 (previously filed as Exhibit 3.1 to the Registrant’s Form 8-K filed on April 26, 2023 and incorporated herein by reference)
10.1	Amended and Restated Credit Agreement dated April 20, 2023, by and among Good Times Restaurants Inc., each of its wholly-owned subsidiaries and Cadence Bank, N.A. (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on April 26, 2023.and incorporated herein by reference)
10.2	Security and Pledge Agreement, dated April 20, 2023, by and among Good Times Restaurants Inc., each of its wholly-owned subsidiaries and Cadence Bank, N.A. (previously filed as Exhibit 10.2 to the Registrant’s Form 8-K filed on April 26, 2023.and incorporated herein by reference)

*31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
*31.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350
*32.1	Certification of Chief Executive Officer and Principal? Financial Officer pursuant to Section 906
101.INS	Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
*104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Filed herewith

Table of Contents

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DATE: August 3, 2023
GOOD TIMES RESTAURANTS INC.


Ryan M. Zink Chief Executive Officer (Principal Executive Officer)

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, Ryan M. Zink, certify that:

1.	I have reviewed this Form 10-Q of Good Times Restaurants Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023

Ryan M. Zink

Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Ryan M. Zink, certify that:

1.	I have reviewed this Form 10-Q of Good Times Restaurants Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023

Ryan M. Zink

Chief Executive Officer

(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection this Form 10-Q of Good Times Restaurants Inc. (the “Company”) for the quarter ended June 27, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ryan M. Zink, as Chief Executive Officer and Principal Financial Officer of the Company, hereby certify, pursuant to and solely for the purpose of 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Ryan M. Zink
Chief Executive Officer (Principal Executive Officer) (Principal Financial Officer)

August 2, 2023

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Jun. 27, 2023	Jul. 25, 2023
Document Information [Line Items]
Entity Central Index Key	0000825324
Entity Registrant Name	Good Times Restaurants Inc.
Amendment Flag	false
Current Fiscal Year End Date	--09-26
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 27, 2023
Document Transition Report	false
Entity File Number	0-18590
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	84-1133368
Entity Address, Address Line One	651 CORPORATE CIRCLE
Entity Address, City or Town	GOLDEN
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80401
City Area Code	303
Local Phone Number	384-1400
Title of 12(b) Security	Common Stock $.001 par value
Trading Symbol	GTIM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		11,560,197

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 27, 2023	Sep. 27, 2022
CURRENT ASSETS:
Cash and cash equivalents	$ 3,684	$ 8,906
Receivables	729	694
Prepaid expenses and other	1,414	888
Inventories	1,353	1,387
Total current assets	7,180	11,875
PROPERTY AND EQUIPMENT:
Land and building	4,670	4,670
Leasehold improvements	37,520	35,906
Fixtures and equipment	31,730	30,664
Total property and equipment	73,920	71,240
Less accumulated depreciation and amortization	(52,429)	(48,989)
Total net property and equipment	21,491	22,251
OTHER ASSETS:
Operating lease right-of-use assets, net	41,283	42,463
Deferred tax assets	11,398	0
Deposits and other assets	285	166
Trademarks	3,900	3,900
Other intangibles, net	14	20
Goodwill	5,713	5,713
Total other assets	62,593	52,262
TOTAL ASSETS:	91,264	86,388
CURRENT LIABILITIES:
Accounts payable	1,022	628
Deferred income	72	48
Operating lease liabilities, current	5,673	5,430
Other accrued liabilities	6,834	6,791
Total current liabilities	13,601	12,897
LONG-TERM LIABILITIES:
Operating lease liabilities, net of current portion	43,683	45,544
Deferred revenues and other liabilities	137	159
Total long-term liabilities	43,820	45,703
SHAREHOLDERS’&NBSP;EQUITY:
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding as of June 27, 2023, and September 27, 2022	0	0
Common stock, $.001 par value; 50,000,000 shares authorized; 12,977,433 issued; 11,622,727 and 12,274,351 outstanding as of June 27, 2023 and September 27, 2022, respectively	13	13
Capital contributed in excess of par value	56,768	59,427
Treasury stock, at cost; 1,354,706 and 692,798 shares as of June 27, 2023, and September 27, 2022, respectively	(4,354)	(2,634)
Accumulated deficit	(18,985)	(30,321)
Total Good Times Restaurants Inc. shareholders' equity	33,442	26,485
Non-controlling interests	401	1,303
Total shareholders’ equity	33,843	27,788
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 91,264	$ 86,388

Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Jun. 27, 2023	Sep. 27, 2022
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	12,977,433	12,977,433
Common stock, shares outstanding (in shares)	11,622,727	12,274,351
Treasury stock, shares (in shares)	1,354,706	692,798

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022	Jun. 27, 2023	Jun. 28, 2022
NET REVENUES:
Total net revenues	$ 35,620	$ 36,497	$ 103,799	$ 103,010
RESTAURANT OPERATING COSTS:
Food and packaging costs	10,923	11,767	32,185	32,450
Payroll and other employee benefit costs	11,940	12,295	35,477	35,027
Restaurant occupancy costs	2,432	2,383	7,318	7,088
Other restaurant operating costs	4,811	4,753	14,129	13,558
Preopening costs	80	0	110	50
Depreciation and amortization	919	993	2,740	2,990
Total restaurant operating costs	31,105	32,191	91,959	91,163
General and administrative costs	2,365	2,384	7,040	7,677
Advertising costs	751	807	2,423	2,260
Impairment of long-lived assets	965	303	1,041	2,056
Gain on restaurant asset sale and lease termination	(10)	(9)	(32)	(666)
Litigation contingencies	0	0	0	332
INCOME FROM OPERATIONS:	444	821	1,368	188
Interest and other expense, net	(18)	(12)	(56)	(41)
NET INCOME BEFORE INCOME TAXES:	426	809	1,312	147
Provision for income taxes	551	(1)	10,503	(9)
NET INCOME:	977	808	11,815	138
Income attributable to non-controlling interests	(135)	(339)	(479)	(1,489)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$ 842	$ 469	$ 11,336	$ (1,351)
NET INCOME (LOSS) PER COMMON SHARE:
Basic (in dollars per share)	$ 0.07	$ 0.04	$ 0.96	$ (0.11)
Diluted (in dollars per share)	$ 0.07	$ 0.04	$ 0.95	$ (0.11)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic (in shares)	11,700,044	12,457,251	11,853,441	12,502,449
Diluted (in shares)	11,769,286	12,560,658	11,910,491	12,502,449
Service [Member]
NET REVENUES:
Total net revenues	$ 35,376	$ 36,265	$ 103,123	$ 102,305
Franchise [Member]
NET REVENUES:
Total net revenues	$ 244	$ 232	$ 676	$ 705

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Treasury Stock, Common [Member]	Common Stock Outstanding [Member]	Additional Paid-in Capital [Member]	Noncontrolling Interest [Member]	Retained Earnings [Member]	Total
BALANCES (in shares) at Sep. 28, 2021	376,351	12,512,072
BALANCES at Sep. 28, 2021	$ (1,608)	$ 13	$ 59,021	$ 1,124	$ (27,680)	$ 30,870
Stock-based compensation cost	$ 0	$ 0	95	0	0	95
Restricted stock unit vesting (in shares)	0	13,366
Restricted stock unit vesting	$ 0	$ 0	0	0	0	0
Stock Option Exercise (in shares)	0	5,000
Stock Option Exercise	$ 0	$ 0	6	0	0	6
Income	0	0	0	920	0	920
Distributions	0	0	0	(632)	0	(632)
Net Income attributable to common shareholders and comprehensive income	$ 0	$ 0	0	0	330	330
Common stock grants (in shares)	0	9,256
Common stock grants	$ 0	$ 0	0	0	0	0
BALANCES (in shares) at Dec. 28, 2021	376,351	12,539,694
BALANCES at Dec. 28, 2021	$ (1,608)	$ 13	59,122	1,412	(27,350)	31,589
BALANCES (in shares) at Sep. 28, 2021	376,351	12,512,072
BALANCES at Sep. 28, 2021	$ (1,608)	$ 13	59,021	1,124	(27,680)	$ 30,870
Stock Option Exercise (in shares)						28,797
Income						$ 1,489
BALANCES (in shares) at Jun. 28, 2022	545,999	12,393,843
BALANCES at Jun. 28, 2022	$ (2,213)	$ 13	59,318	1,376	(29,031)	29,463
BALANCES (in shares) at Dec. 28, 2021	376,351	12,539,694
BALANCES at Dec. 28, 2021	$ (1,608)	$ 13	59,122	1,412	(27,350)	31,589
Stock-based compensation cost	$ 0	$ 0	52	0	0	52
Restricted stock unit vesting (in shares)	0	0
Restricted stock unit vesting	$ 0	$ 0	0	0	0	0
Stock Option Exercise (in shares)	0	23,797
Stock Option Exercise	$ 0	$ 0	84	0	0	84
Repurchases of common stock (in shares)	75,900	(75,900)
Repurchases of common stock	$ (331)	$ 0	0	0	0	(331)
Income	0	0	0	230	0	230
Distributions	0	0	0	(112)	0	(112)
Net Income attributable to common shareholders and comprehensive income	$ 0	$ 0	0	0	(2,150)	(2,150)
BALANCES (in shares) at Mar. 29, 2022	452,251	12,487,591
BALANCES at Mar. 29, 2022	$ (1,939)	$ 13	59,258	1,530	(29,500)	29,362
Stock-based compensation cost	$ 0	$ 0	60	0	0	60
Repurchases of common stock (in shares)	93,748	(93,748)
Repurchases of common stock	$ (274)	$ 0	0	0	0	(274)
Income	0	0	0	339	0	339
Distributions	0	0	0	(493)	0	(493)
Net Income attributable to common shareholders and comprehensive income	$ 0	$ 0	0	0	469	469
BALANCES (in shares) at Jun. 28, 2022	545,999	12,393,843
BALANCES at Jun. 28, 2022	$ (2,213)	$ 13	59,318	1,376	(29,031)	29,463
BALANCES (in shares) at Sep. 27, 2022	692,798	12,274,351
BALANCES at Sep. 27, 2022	$ (2,634)	$ 13	59,427	1,303	(30,321)	27,788
Stock-based compensation cost	$ 0	$ 0	46	0	0	46
Restricted stock unit vesting (in shares)	0	8,284
Restricted stock unit vesting	$ 0	$ 0	(92)	0	0	(92)
Stock Option Exercise (in shares)	0	2,000
Stock Option Exercise	$ 0	$ 0	5	0	0	5
Repurchases of common stock (in shares)	371,395	(371,395)
Repurchases of common stock	$ (873)	$ 0	0	0	0	(873)
Income	0	0	0	222	0	222
Distributions	0	0	0	(172)	0	(172)
Contributions	0	0	0	13	0	13
Net Income attributable to common shareholders and comprehensive income	$ 0	$ 0	0	0	(127)	(127)
BALANCES (in shares) at Dec. 27, 2022	1,064,193	11,913,240
BALANCES at Dec. 27, 2022	$ (3,507)	$ 13	59,386	1,366	(30,448)	26,810
BALANCES (in shares) at Sep. 27, 2022	692,798	12,274,351
BALANCES at Sep. 27, 2022	$ (2,634)	$ 13	59,427	1,303	(30,321)	$ 27,788
Stock Option Exercise (in shares)						2,000
Income						$ 479
Distributions						(563)
Contributions						13
Purchase of Non-controlling Interests						(831)
BALANCES (in shares) at Jun. 27, 2023	1,354,706	11,622,727
BALANCES at Jun. 27, 2023	$ (4,354)	$ 13	56,768	401	(18,985)	33,843
BALANCES (in shares) at Dec. 27, 2022	1,064,193	11,913,240
BALANCES at Dec. 27, 2022	$ (3,507)	$ 13	59,386	1,366	(30,448)	26,810
Stock-based compensation cost	$ 0	$ 0	43	0	0	43
Repurchases of common stock (in shares)	166,890	(166,890)
Repurchases of common stock	$ (467)	$ 0	0	0	0	(467)
Income	0	0	0	122	0	122
Distributions	0	0	0	(294)	0	(294)
Net Income attributable to common shareholders and comprehensive income	0	0	0	0	10,621	10,621
Purchase of Non-controlling Interests	$ 0	$ 0	(2,675)	(831)	0	(3,506)
BALANCES (in shares) at Mar. 28, 2023	1,231,083	11,746,350
BALANCES at Mar. 28, 2023	$ (3,974)	$ 13	56,754	363	(19,827)	33,329
Stock-based compensation cost	$ 0	$ 0	14	0	0	14
Repurchases of common stock (in shares)	123,623	(123,623)
Repurchases of common stock	$ (380)	$ 0	0	0	0	(380)
Income	0	0	0	135	0	135
Distributions	0	0	0	(97)	0	(97)
Net Income attributable to common shareholders and comprehensive income	$ 0	$ 0	0	0	842	842
BALANCES (in shares) at Jun. 27, 2023	1,354,706	11,622,727
BALANCES at Jun. 27, 2023	$ (4,354)	$ 13	$ 56,768	$ 401	$ (18,985)	$ 33,843

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 11,815,000	$ 138,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,809,000	3,129,000
Impairment of long-lived assets	1,041,000	2,056,000
Stock-based compensation expense	103,000	207,000
Loss (gain) on lease termination and disposal of assets	44,000	(642,000)
Recognition of deferred gain on sale of restaurant building	(76,000)	(24,000)
Deferred income taxes	(10,510,000)	9,000
Changes in operating assets and liabilities:
Receivables and other	(35,000)	(18,000)
Prepaid expense	(526,000)	(742,000)
Inventories	34,000	(62,000)
Deposits and other	(119,000)	70,000
Accounts payable	444,000	(529,000)
Net change in ROU assets and operating lease liabilities	(438,000)	(297,000)
Accrued and other liabilities	121,000	1,123,000
Net cash provided by operating activities	4,707,000	4,418,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the purchase of property and equipment	(3,178,000)	(1,623,000)
Acquisition of restaurant from franchisee, net of cash acquired	0	(728,000)
Proceeds from sale of fixed assets	0	745,000
Purchase of non-controlling interests	(4,394,000)	0
Net cash used in investing activities	(7,572,000)	(1,606,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment for the purchase of treasury stock	(1,720,000)	(605,000)
Restricted stock vesting settled in cash	(92,000)	0
Proceeds from stock option exercise	5,000	90,000
Distributions to non-controlling interests	(563,000)	(1,449,000)
Contributions from non-controlling interests	13,000	0
Net cash used in financing activities	(2,357,000)	(1,964,000)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(5,222,000)	848,000
CASH AND CASH EQUIVALENTS, beginning of period	8,906,000	8,856,000
CASH AND CASH EQUIVALENTS, end of period	3,684,000	9,704,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	15,000	14,000
Change in accounts payable attributable to the purchase of property and equipment	$ (50,000)	$ (214,000)

Note 1 - Basis of Presentation

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

Note 1.

Basis of Presentation

The Company operates and licenses full-service restaurants under the brand Bad Daddy’s Burger Bar that are primarily located in Colorado and in the Southeast region of the United States.

The Company operates and franchises drive-thru fast-food hamburger restaurants under the brand Good Times Burgers & Frozen Custard, all of which are located in Colorado and Wyoming.

Reclassification – Certain prior year balances have been reclassified to conform to the current year’s presentation. Such reclassifications had no effect on the net income.

Note 2 - Recent Accounting Pronouncements

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Table Text Block]

Note 2.

Recent Accounting Pronouncements

Note 3 - Revenue

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note 3.

Revenue

Revenue Recognition

Note 4 - Goodwill and Intangible Assets

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

Note 4.

Goodwill and Intangible Assets

The following table presents goodwill and intangible assets as of June 27, 2023 and September 27, 2022 (in thousands):

	June 27, 2023							September 27, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets subject to amortization:
Non-compete agreements	$	25	$	(11	)	$	14	$	25	$	(5	)	$	20
Indefinite-lived intangible assets:
Trademarks		3,900		-			3,900		3,900		-			3,900
Intangible assets, net	$	3,925	$	(11	)	$	3,914	$	3,925	$	(5	)	$	3,920

Goodwill	$	5,713	$	-		$	5,713	$	5,713	$	-		$	5,713

Note 5 - Stock-based Compensation

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 5.

Stock-Based Compensation

Stock option awards

	Three Quarters Ended June 27, 2023 Incentive and Non-Qualified Stock Options			Three Quarters Ended June 28, 2022 Incentive and Non-Qualified Stock Options

Expected term (years)		7.5			6.5
Expected volatility	60.0%	-	60.2%		61.31%
Risk-free interest rate	3.33%	-	4.21%		1.76%
Expected dividends		-			-

The following table summarizes stock option activity for the three quarters ended June 27, 2023 under all plans:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Yrs)

Outstanding at beginning of year		470,161		$	3.97
Options granted		45,000		$	2.81
Options exercised		(2,000	)	$	2.31
Options Forfeited		(64,137	)	$	3.43
Outstanding June 27, 2023		449,024		$	3.94		5.0
Exercisable June 27, 2023		334,103		$	3.66		4.6

There were 45,000 stock options awarded during the three quarters ended June 27, 2023.

Restricted Stock Units

A summary of the status of non-vested restricted stock units as of June 27, 2023 is presented below.

	Shares			Grant Date Fair Value Per Share
Non-vested units at beginning of year		73,336		$1.54	to	$4.50
Units granted		25,750			$2.29
Units vested		(46,336	)		$1.54
Units forfeited		(2,750	)	$2.29	to	$4.50
Non-vested units at June 27, 2023		50,000		$2.29	to	$4.50

Restricted and Unrestricted Common Stock Awards

Note 6 - Gain on Sale of Assets and Lease Termination

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 6.

Gain on Sale of Assets and Lease Termination

Note 7 - Prepaid Expenses and Other Current Assets

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Prepaid Expenses and Other Current Assets [Text Block]

Note 7.

Prepaid expense and other current assets

Prepaid expenses and other current assets consist of the following as of:

	June 27, 2023		September 27, 2022
Prepaid Rent	$	779	$	765
Prepaid Insurance		382		3
Other		253		120
Total	$	1,414	$	888

Note 8 - Other Accrued Liabilities

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note 8.

Other Accrued Liabilities

Other accrued liabilities consist of the following as of:

	June 27, 2023		September 27, 2022
Wages and other employee benefits	$	3,116	$	2,773
Taxes, other than income taxes		1,215		1,166
Gift card liability, net of breakage		1,229		985
General expense accrual and other		1,274		1,867
Total	$	6,834	$	6,791

Note 9 - Notes Payable and Long-term Debt

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

Note 9.

Notes Payable and Long-Term Debt

Cadence Credit Facility

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%.

Note 10 - Net Income (Loss) Per Common Share

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 10.

Net Income (Loss) per Common Share

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding:

	Quarter Ended				Year-to-Date
	June 27, 2023		June 28, 2022		June 27, 2023		June 28, 2022
Weighted-average shares outstanding basic		11,700,044		12,457,251		11,853,441		12,502,449
Effect of potentially dilutive securities:
Stock options		19,242		29,071		7,050		-
Restricted stock units		50,000		74,336		50,000		-
Weighted-average shares outstanding diluted		11,769,286		12,560,658		11,910,491		12,502,449
Excluded from diluted weighted average shares outstanding:
Antidilutive		345,691		387,378		354,024		249,752

Note 11 - Contingent Liabilities and Liquidity

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 11.

Contingent Liabilities and Liquidity

Note 12 - Leases

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 12.

Leases

Components of operating lease costs are as follows for the fiscal quarters ended June 27, 2023 and June 28, 2022:

Lease cost	Classification	June 27, 2023			June 28, 2022
Operating lease cost	Occupancy, Other restaurant operating costs and General and administrative expenses, net	$	1,824		$	1,866
Variable lease cost	Occupancy		60			27
Sublease income	Occupancy		(137	)		(136	)
		$	1,747		$	1,757

Weighted average lease term and discount rate are as follows:

	June 27, 2023			June 28, 2022
Weighted average remaining lease term (in years)		8.16			8.85

Weighted average discount rate		5.0	%		5.0	%

Supplemental cash flow disclosures for the three fiscal quarters ended June 27, 2023:

	June 27, 2023		June 28, 2022
Cash paid for operating lease liabilities	$	5,771	$	5,383

Non-cash operating lease assets obtained in exchange for operating lease liabilities	$	1,201	$	734

Supplemental balance sheet disclosures:

		June 27, 2023		September 27, 2022
Right-of-use assets	Operating lease assets	$	41,283	$	42,463

Current lease liabilities	Operating lease liability	$	5,673	$	5,430
Non-current lease liabilities	Operating lease liability, less current portion		43,683		45,544
Total lease liabilities		$	49,356	$	50,974

Future minimum rent payments for our operating leases for each of the next five years as of June 27, 2023 are as follows:

Fiscal year ending:	Total
Remainder of 2023	$	1,986
2024		7,983
2025		8,081
2026		7,665
2027		7,368
Thereafter		27,413
Total minimum lease payments		60,496
Less: imputed interest		(11,140	)
Present value of lease liabilities	$	49,356

Note 13 - Impairment of Long-lived Assets and Trademarks

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Asset Impairment Charges [Text Block]

Note 13.

Impairment of Long-Lived Assets and Trademarks

Note 14 - Income Taxes

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 14.

Income Taxes

Note 15 - Non-controlling Interests

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Noncontrolling Interest Disclosure [Text Block]

Note 15.

Non-controlling Interests

The following table summarizes the activity in non-controlling interests during the three quarters ended June 27, 2023 (in thousands):

	Bad Daddy’s			Good Times			Total
Balance at September 27, 2022	$	1,041		$	262		$	1,303
Income		219			260			479
Purchase of Non-controlling Interests		(831	)		-			(831	)
Distributions		(442	)		(121	)		(563	)
Contribution		13			-			13
Balance at June 27, 2023		-			401			401

Note 16 - Segment Reporting

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 16.

Segment Reporting

The following tables present information about our reportable segments for the respective periods (in thousands):

	Quarter Ended (13 Weeks)					Year-to-Date (39 Weeks)
	June 27, 2023			June 28, 2022		June 27, 2023			June 28, 2022
Revenues
Bad Daddy’s	$	26,161		$	27,231	$	77,795		$	77,427
Good Times		9,459			9,266		26,004			25,583
	$	35,620			36,497	$	103,799			103,010
Income from operations
Bad Daddy’s	$	(946	)		635	$	(277	)		138
Good Times	$	1,390			186	$	1,645			50
	$	444			821	$	1,368			188
Capital expenditures
Bad Daddy’s	$	1,295			652	$	1,901			1,480
Good Times		302			364		1,277			471
	$	1,597		$	1,016	$	3,178		$	1,951

	June 27, 2023		September 27, 2022
Property and equipment, net
Bad Daddy’s	$	18,048	$	19,575
Good Times		3,443		2,676
	$	21,491	$	22,251

Note 17 - Subsequent Events

9 Months Ended

Jun. 27, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

Note 17.

Subsequent Events

None.

Note 4 - Goodwill and Intangible Assets (Tables)

9 Months Ended

Jun. 27, 2023

Notes Tables

Schedule of Intangible Assets and Goodwill [Table Text Block]

	June 27, 2023							September 27, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Intangible assets subject to amortization:
Non-compete agreements	$	25	$	(11	)	$	14	$	25	$	(5	)	$	20
Indefinite-lived intangible assets:
Trademarks		3,900		-			3,900		3,900		-			3,900
Intangible assets, net	$	3,925	$	(11	)	$	3,914	$	3,925	$	(5	)	$	3,920

Goodwill	$	5,713	$	-		$	5,713	$	5,713	$	-		$	5,713

Note 5 - Stock-based Compensation (Tables)

9 Months Ended

Jun. 27, 2023

Notes Tables

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Three Quarters Ended June 27, 2023 Incentive and Non-Qualified Stock Options			Three Quarters Ended June 28, 2022 Incentive and Non-Qualified Stock Options

Expected term (years)		7.5			6.5
Expected volatility	60.0%	-	60.2%		61.31%
Risk-free interest rate	3.33%	-	4.21%		1.76%
Expected dividends		-			-

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Yrs)

Outstanding at beginning of year		470,161		$	3.97
Options granted		45,000		$	2.81
Options exercised		(2,000	)	$	2.31
Options Forfeited		(64,137	)	$	3.43
Outstanding June 27, 2023		449,024		$	3.94		5.0
Exercisable June 27, 2023		334,103		$	3.66		4.6

Nonvested Restricted Stock Shares Activity [Table Text Block]

	Shares			Grant Date Fair Value Per Share
Non-vested units at beginning of year		73,336		$1.54	to	$4.50
Units granted		25,750			$2.29
Units vested		(46,336	)		$1.54
Units forfeited		(2,750	)	$2.29	to	$4.50
Non-vested units at June 27, 2023		50,000		$2.29	to	$4.50

Note 7 - Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Jun. 27, 2023

Notes Tables

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]

	June 27, 2023		September 27, 2022
Prepaid Rent	$	779	$	765
Prepaid Insurance		382		3
Other		253		120
Total	$	1,414	$	888

Note 8 - Other Accrued Liabilities (Tables)

9 Months Ended

Jun. 27, 2023

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	June 27, 2023		September 27, 2022
Wages and other employee benefits	$	3,116	$	2,773
Taxes, other than income taxes		1,215		1,166
Gift card liability, net of breakage		1,229		985
General expense accrual and other		1,274		1,867
Total	$	6,834	$	6,791

Note 10 - Net Income (Loss) Per Common Share (Tables)

9 Months Ended

Jun. 27, 2023

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Quarter Ended				Year-to-Date
	June 27, 2023		June 28, 2022		June 27, 2023		June 28, 2022
Weighted-average shares outstanding basic		11,700,044		12,457,251		11,853,441		12,502,449
Effect of potentially dilutive securities:
Stock options		19,242		29,071		7,050		-
Restricted stock units		50,000		74,336		50,000		-
Weighted-average shares outstanding diluted		11,769,286		12,560,658		11,910,491		12,502,449
Excluded from diluted weighted average shares outstanding:
Antidilutive		345,691		387,378		354,024		249,752

Note 12 - Leases (Tables)

9 Months Ended

Jun. 27, 2023

Notes Tables

Lease, Cost [Table Text Block]

Lease cost	Classification	June 27, 2023			June 28, 2022
Operating lease cost	Occupancy, Other restaurant operating costs and General and administrative expenses, net	$	1,824		$	1,866
Variable lease cost	Occupancy		60			27
Sublease income	Occupancy		(137	)		(136	)
		$	1,747		$	1,757

Schedule of Weighted Average Lease Term and Discount Rate [Table Text Block]

	June 27, 2023			June 28, 2022
Weighted average remaining lease term (in years)		8.16			8.85

Weighted average discount rate		5.0	%		5.0	%

Schedule of Supplemental Cash Flow Information Related to Leases [Table Text Block]

	June 27, 2023		June 28, 2022
Cash paid for operating lease liabilities	$	5,771	$	5,383

Non-cash operating lease assets obtained in exchange for operating lease liabilities	$	1,201	$	734

Schedule of Components of Lease Assets and Liabilities [Table Text Block]

		June 27, 2023		September 27, 2022
Right-of-use assets	Operating lease assets	$	41,283	$	42,463

Current lease liabilities	Operating lease liability	$	5,673	$	5,430
Non-current lease liabilities	Operating lease liability, less current portion		43,683		45,544
Total lease liabilities		$	49,356	$	50,974

Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Fiscal year ending:	Total
Remainder of 2023	$	1,986
2024		7,983
2025		8,081
2026		7,665
2027		7,368
Thereafter		27,413
Total minimum lease payments		60,496
Less: imputed interest		(11,140	)
Present value of lease liabilities	$	49,356

Note 15 - Non-controlling Interests (Tables)

9 Months Ended

Jun. 27, 2023

Notes Tables

Schedule of Activity in Noncontrolling Interests [Table Text Block]

	Bad Daddy’s			Good Times			Total
Balance at September 27, 2022	$	1,041		$	262		$	1,303
Income		219			260			479
Purchase of Non-controlling Interests		(831	)		-			(831	)
Distributions		(442	)		(121	)		(563	)
Contribution		13			-			13
Balance at June 27, 2023		-			401			401

Note 16 - Segment Reporting (Tables)

9 Months Ended

Jun. 27, 2023

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Quarter Ended (13 Weeks)					Year-to-Date (39 Weeks)
	June 27, 2023			June 28, 2022		June 27, 2023			June 28, 2022
Revenues
Bad Daddy’s	$	26,161		$	27,231	$	77,795		$	77,427
Good Times		9,459			9,266		26,004			25,583
	$	35,620			36,497	$	103,799			103,010
Income from operations
Bad Daddy’s	$	(946	)		635	$	(277	)		138
Good Times	$	1,390			186	$	1,645			50
	$	444			821	$	1,368			188
Capital expenditures
Bad Daddy’s	$	1,295			652	$	1,901			1,480
Good Times		302			364		1,277			471
	$	1,597		$	1,016	$	3,178		$	1,951

	June 27, 2023		September 27, 2022
Property and equipment, net
Bad Daddy’s	$	18,048	$	19,575
Good Times		3,443		2,676
	$	21,491	$	22,251

Note 1 - Basis of Presentation (Details Textual) - USD ($)	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022
Marketing and Advertising Expense	$ 212,000	$ 204,000
Receivables, Net, Current	729,000	694,000
Receivables From Large Box Retail Partners [Member]
Receivables, Net, Current	84,000	235,000
Rebate Receivables [Member]
Receivables, Net, Current	291,000	127,000
Third Party Delivery Receivables [Member]
Receivables, Net, Current	298,000	229,000
Franchise and Other Receivables [Member]
Receivables, Net, Current	$ 56,000	$ 103,000

Note 4 - Goodwill and Intangible Assets (Details Textual)	9 Months Ended		12 Months Ended
	Jun. 27, 2023 USD ($)	Jun. 28, 2022 USD ($)	Sep. 27, 2022 USD ($)
Number of Reporting Units	2
Goodwill, Impairment Loss	$ 0		$ 0
Amortization of Intangible Assets	6,000	$ 3,000
Goodwill	5,713,000		$ 5,713,000
Good Times Restaurants [Member]
Goodwill	96,000	96,000
Bad Daddy’s Restaurants [Member]
Goodwill	$ 5,617,000	$ 5,617,000

Note 4 - Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 27, 2023	Sep. 27, 2022
Non-compete agreements	$ (11)	$ (5)
Intangible assets, gross	3,925	3,925
Intangible assets, net	3,914	3,920
Goodwill, gross	5,713	5,713
Goodwill, accumulated amortization	0	0
Goodwill	5,713	5,713
Trademarks [Member]
Indefinite-lived intangible assets	3,900	3,900
Noncompete Agreements [Member]
Intangible assets subject to amortization, gross	25	25
Non-compete agreements	(11)	(5)
Intangible assets subject to amortization, net	$ 14	$ 20

Note 5 - Stock-based Compensation (Details Textual) - USD ($)	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022	Feb. 08, 2022	May 24, 2018
Share-Based Payment Arrangement, Expense	$ 104,000	$ 207,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)	45,000	105,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares)	2,000	28,797
Proceeds from Stock Options Exercised	$ 5,000	$ 90,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Intrinsic Value	296,000
Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 104,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	1 year 10 months 24 days
Non-qualified Stock Option [Member] \| Senior Vice President of Finance [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in shares)		25,000
Restricted Stock Units (RSUs) [Member]
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	1 year 10 months 24 days
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	25,750	28,000
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount	$ 106,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)	$ 2.29
Restricted Stock [Member]
Share-Based Payment Arrangement, Expense		$ 40,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	0	9,256
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)		$ 4.35
The 2018 Omnibus Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares)			1,050,000	900,000

Note 5 - Stock-based Compensation - Weighted Average Assumptions of Stock Options (Details)	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022
Expected term (years) (Year)	7 years 6 months	6 years 6 months
Expected volatility, minimum	60.00%
Expected volatility, maximum	60.20%
Expected volatility		61.31%
Risk-free interest rate, minimum	3.33%
Risk-free interest rate, maximum	4.21%
Risk-free interest rate		1.76%
Expected dividends	0.00%	0.00%

Note 5 - Stock-based Compensation - Summary of Stock Option Activity (Details) - $ / shares	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022
Outstanding at beginning of year, shares (in shares)	470,161
Outstanding at beginning of year, weighted average exercise price (in dollars per share)	$ 3.97
Options granted, shares (in shares)	45,000	105,000
Options granted, weighted average exercise price (in dollars per share)	$ 2.81
Options exercised, shares (in shares)	(2,000)
Options exercised, weighted average exercise price (in dollars per share)	$ 2.31
Options Forfeited, shares (in shares)	(64,137)
Options Forfeited, weighted average exercise price (in dollars per share)	$ 3.43
Outstanding, shares (in shares)	449,024
Outstanding, weighted average exercise price (in dollars per share)	$ 3.94
Outstanding, weighted average remaining contractual life (Year)	5 years
Exercisable, shares (in shares)	334,103
Exercisable, weighted average exercise price (in dollars per share)	$ 3.66
Exercisable, weighted average remaining contractual life (Year)	4 years 7 months 6 days

Note 5 - Stock-based Compensation - Non-vested Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022
Non-vested units at beginning of year, shares (in shares)	73,336
Units granted, shares (in shares)	25,750	28,000
Units granted, grant date fair value per share (in dollars per share)	$ 2.29
Units vested, shares (in shares)	(46,336)
Units vested, grant date fair value per share (in dollars per share)	$ 1.54
Units forfeited, shares (in shares)	(2,750)
Non-vested units, shares (in shares)	50,000
Minimum [Member]
Non-vested units at beginning of year, grant date fair value per share (in dollars per share)	$ 1.54
Units forfeited, grant date fair value per share (in dollars per share)	2.29
Non-vested units, grant date fair value per share (in dollars per share)	2.29
Maximum [Member]
Non-vested units at beginning of year, grant date fair value per share (in dollars per share)	4.50
Units forfeited, grant date fair value per share (in dollars per share)	4.50
Non-vested units, grant date fair value per share (in dollars per share)	$ 4.50

Note 6 - Gain on Sale of Assets and Lease Termination (Details Textual) - USD ($)	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022
Sale Leaseback Transactions, Deferred Gain, Net	$ 76,000	$ 7,000
Gain (Loss) on Disposition of Other Assets	$ (44,000)
Gain (Loss) on Contract Termination		$ 642,000

Note 7 - Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 27, 2023	Sep. 27, 2022
Prepaid Rent	$ 779	$ 765
Prepaid Insurance	382	3
Other	253	120
Total	$ 1,414	$ 888

Note 8 - Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 27, 2023	Sep. 27, 2022
Wages and other employee benefits	$ 3,116	$ 2,773
Taxes, other than income taxes	1,215	1,166
Gift card liability, net of breakage	1,229	985
General expense accrual and other	1,274	1,867
Total	$ 6,834	$ 6,791

Note 9 - Notes Payable and Long-term Debt (Details Textual) - Cadence Bank [Member] - Revolving Credit Facility [Member] - USD ($)	9 Months Ended
	Jun. 27, 2023	Apr. 20, 2023
Prior Cadence Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 8,000,000
Line of Credit Facility, Commitment Fee Percentage	0.25%
Debt, Weighted Average Interest Rate	8.07%
Senior Credit Facility [Member]
Debt Instrument, Covenant, Minimum Outstanding Balance for New Specified Leverage Ratio		$ 4,000,000.0

Note 10 - Net Income (Loss) Per Common Share - Reconciliation of Basic to Diluted Weighted Average Shares Outstanding (Details) - shares	3 Months Ended			9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022	Jun. 28, 2022	Jun. 27, 2023	Jun. 28, 2022
Basic (in shares)	11,700,044	12,457,251	12,457,251	11,853,441	12,502,449
Weighted-average shares outstanding diluted (in shares)	11,769,286	12,560,658	12,560,658	11,910,491	12,502,449
Antidilutive (in shares)	345,691		387,378	354,024	249,752
Share-Based Payment Arrangement, Option [Member]
Effect of potentially dilutive securities (in shares)	19,242		29,071	7,050	0
Restricted Stock Units (RSUs) [Member]
Effect of potentially dilutive securities (in shares)	50,000		74,336	50,000	0

Note 11 - Contingent Liabilities and Liquidity (Details Textual) - White Winston Select Asset Funds, LLC and GT Acquisition Group, Inc. v. Good Times Restaurants, Inc. [Member] - Pending Litigation [Member] - USD ($)	Jul. 30, 2021	Mar. 28, 2022
Loss Contingency, Damages Sought, Value	$ 18,000,000
Loss Contingency Accrual		$ 332,000

Note 12 - Leases (Details Textual)	Jun. 27, 2023
Minimum [Member]
Lessee, Operating Lease, Term of Contract (Year)	10 years
Lessee, Operating Lease, Renewal Term (Year)	10 years
Maximum [Member]
Lessee, Operating Lease, Term of Contract (Year)	20 years
Lessee, Operating Lease, Renewal Term (Year)	15 years
Lessee, Operating Lease, Remaining Lease Term (Year)	20 years

Note 12 - Leases - Components of Operating Lease Costs (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022
Operating lease cost	$ 1,824	$ 1,866
Variable lease cost	60	27
Sublease income	(137)	(136)
Lease, Cost	$ 1,747	$ 1,757

Note 12 - Leases - Weighted Average Lease Term and Discount Rate (Details)	Jun. 27, 2023	Jun. 28, 2022
Weighted average remaining lease term (in years) (Year)	8 years 1 month 28 days	8 years 10 months 6 days
Weighted average discount rate	5.00%	5.00%

Note 12 - Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022
Cash paid for operating lease liabilities	$ 5,771	$ 5,383
Non-cash operating lease assets obtained in exchange for operating lease liabilities	$ 1,201	$ 734

Note 12 - Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 27, 2023	Sep. 27, 2022
Right-of-use assets	$ 41,283	$ 42,463
Current lease liabilities	5,673	5,430
Non-current lease liabilities	43,683	45,544
Total lease liabilities	$ 49,356	$ 50,974

Note 12 - Leases - Future Minimum Rent Payments (Details) - USD ($) $ in Thousands	Jun. 27, 2023	Sep. 27, 2022
Remainder of 2023	$ 1,986
2024	7,983
2025	8,081
2026	7,665
2027	7,368
Thereafter	27,413
Total minimum lease payments	60,496
Less: imputed interest	(11,140)
Present value of lease liabilities	$ 49,356	$ 50,974

Note 13 - Impairment of Long-lived Assets and Trademarks (Details Textual)	3 Months Ended		9 Months Ended
	Jun. 27, 2023 USD ($)	Jun. 28, 2022 USD ($)	Jun. 27, 2023 USD ($)	Jun. 28, 2022 USD ($)
Impairment, Long-Lived Asset, Held-for-Use	$ 965,000	$ 303,000	$ 1,041,000	$ 2,056,000
Trademarks [Member]
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)			0	0
Restaurant Assets [Member]
Impairment, Long-Lived Asset, Held-for-Use	$ 0		$ 1,041,000	2,056,000
Restaurant Assets [Member] \| Good Times Restaurants [Member]
Impairment, Long-Lived Asset, Held-for-Use		$ 303,000		$ 790,000
Number of Restaurants With Impairment		1		3
Restaurant Assets [Member] \| Bad Daddy’s Restaurants [Member]
Impairment, Long-Lived Asset, Held-for-Use				$ 1,266,000
Number of Restaurants With Impairment				1

Note 14 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022	Jun. 27, 2023	Jun. 28, 2022
Effective Income Tax Rate Reconciliation, Percent	(189.98%)	(0.21%)	(1261.02%)	(0.70%)
Open Tax Year			2020
Unrecognized Tax Benefits	$ 0		$ 0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	$ 0		$ 0

Note 15 - Non-controlling Interests (Details Textual)	3 Months Ended	9 Months Ended
Note 15 - Non-controlling Interests (Details Textual)	Jun. 27, 2023 USD ($)	Jun. 27, 2023 USD ($)	Jun. 28, 2022 USD ($)
Payments to Acquire Interest in Subsidiaries and Affiliates		$ 4,394,000	$ (0)
Good Times Restaurants [Member]
Number of Restaurants	6	6
Bad Daddy’s Restaurants [Member]
Number of Restaurants	5	5
Payments to Acquire Interest in Subsidiaries and Affiliates	$ 4,394,000

Note 15 - Non-controlling Interests - Summary of Activity in Non-controlling Interests (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Jun. 27, 2023	Mar. 28, 2023	Dec. 27, 2022	Jun. 28, 2022	Mar. 29, 2022	Dec. 28, 2021	Jun. 27, 2023
Balance			$ 1,303				$ 1,303
Income							479
Purchase of Non-controlling Interests		$ (3,506)					(831)
Distributions	$ (97)	$ (294)	(172)	$ (493)	$ (112)	$ (632)	(563)
Contribution			13				13
Balance	401						401
Bad Daddy’s Restaurants [Member]
Balance			1,041				1,041
Income							219
Purchase of Non-controlling Interests							(831)
Distributions							(442)
Contribution							13
Balance	0						0
Good Times Restaurants [Member]
Balance			$ 262				262
Income							260
Purchase of Non-controlling Interests							0
Distributions							(121)
Contribution							0
Balance	$ 401						$ 401

Note 16 - Segment Reporting - Information About Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Jun. 27, 2023	Jun. 28, 2022	Jun. 28, 2022	Jun. 27, 2023	Jun. 28, 2022	Sep. 27, 2022
Revenues	$ 35,620	$ 36,497	$ 36,497	$ 103,799	$ 103,010
Income (Loss) from operations	444	$ 821	821	1,368	188
Capital expenditures	1,597		1,016	3,178	1,951
Property and equipment, net	21,491			21,491		$ 22,251
Bad Daddy’s Restaurants [Member]
Revenues	26,161		27,231	77,795	77,427
Income (Loss) from operations	(946)		635	(277)	138
Capital expenditures	1,295		652	1,901	1,480
Property and equipment, net	18,048			18,048		19,575
Good Times Restaurants [Member]
Revenues	9,459		9,266	26,004	25,583
Income (Loss) from operations	1,390		186	1,645	50
Capital expenditures	302		$ 364	1,277	$ 471
Property and equipment, net	$ 3,443			$ 3,443		$ 2,676