0001214659-18-001024.txt : 20180209 0001214659-18-001024.hdr.sgml : 20180209 20180209120119 ACCESSION NUMBER: 0001214659-18-001024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 58 CONFORMED PERIOD OF REPORT: 20171226 FILED AS OF DATE: 20180209 DATE AS OF CHANGE: 20180209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Good Times Restaurants Inc. CENTRAL INDEX KEY: 0000825324 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 841133368 STATE OF INCORPORATION: NV FISCAL YEAR END: 0925 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18590 FILM NUMBER: 18589848 BUSINESS ADDRESS: STREET 1: 141 UNION BOULEVARD STREET 2: 400 CITY: LAKEWOOD STATE: CO ZIP: 80228 BUSINESS PHONE: 303-384-1440 MAIL ADDRESS: STREET 1: 141 UNION BOULEVARD STREET 2: 400 CITY: LAKEWOOD STATE: CO ZIP: 80228 FORMER COMPANY: FORMER CONFORMED NAME: GOOD TIMES RESTAURANTS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PARAMOUNT VENTURES INC DATE OF NAME CHANGE: 19900205 10-Q 1 p2818010q.htm

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 December 26, 2017

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)

141 UNION BLVD, SUITE 400, LAKEWOOD, CO 80228
(Address of Principal Executive Offices, Including Zip Code)
(303) 384-1400
(Registrant's Telephone Number, Including Area Code)

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post 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
(Do not check if 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 February 9, 2018, there were 12,468,326 shares of the Registrant's common stock, par value $0.001 per share, issued and outstanding.
 

 

 
Form 10-Q
Quarter Ended December 26, 2017
 
 
INDEX
PAGE
     
 
PART I - FINANCIAL INFORMATION
 
     
Item 1.
Financial Statements
 
     
 
3
     
 
4
     
 
5
     
 
6 – 12
     
Item 2.
13 – 20
     
Item 3.
20
     
Item 4T.
20
     
 
PART II - OTHER INFORMATION
 
     
Item 1.
22
     
Item 1A.
22
     
Item 2.
22
     
Item 3.
22
     
Item 4.
22
     
Item 5.
22
     
Item 6.
22
     
 
23
     
 
CERTIFICATIONS
 
 
 
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)
 
   
Dec 26, 2017
   
Sep 26, 2017
 
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
3,299
   
$
4,337
 
Receivables, net of allowance for doubtful accounts of $0
   
643
     
573
 
Prepaid expenses and other
   
216
     
296
 
Inventories
   
882
     
847
 
Notes receivable
   
13
     
13
 
Total current assets
   
5,053
     
6,066
 
PROPERTY AND EQUIPMENT:
               
Land and building
   
5,002
     
5,001
 
Leasehold improvements
   
22,053
     
21,159
 
Fixtures and equipment
   
21,535
     
20,945
 
Total property and equipment
   
48,590
     
47,105
 
Less accumulated depreciation and amortization
   
(19,520
)
   
(18,636
)
Total net property and equipment
   
29,070
     
28,469
 
Assets held for sale
   
0
     
1,221
 
OTHER ASSETS:
               
Notes receivable, net of current portion
   
43
     
46
 
Deposits and other assets
   
224
     
240
 
Trademarks
   
3,900
     
3,900
 
Other intangibles, net
   
53
     
61
 
Goodwill
   
15,150
     
15,150
 
Total other assets
   
19,370
     
19,397
 
                 
TOTAL ASSETS:
 
$
53,493
   
$
55,153
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Current maturities of long-term debt and capital lease obligations
 
$
17
   
$
17
 
Accounts payable
   
2,733
     
3,311
 
Deferred income
   
46
     
41
 
Other accrued liabilities
   
2,995
     
3,547
 
Total current liabilities
   
5,791
     
6,916
 
LONG-TERM LIABILITIES:
               
Maturities of long-term debt and capital lease obligations due
after one year
 
$
4,835
   
$
5,339
 
Deferred and other liabilities
   
6,131
     
5,614
 
Total long-term liabilities
   
10,966
     
10,953
 
STOCKHOLDERS’ EQUITY:
               
Good Times Restaurants Inc. stockholders’ equity:
               
Preferred stock, $.01 par value; 5,000,000 shares authorized, no
shares issued and outstanding as of 12/26/17 and 09/26/17
   
0
     
0
 
Common stock, $.001 par value; 50,000,000 shares authorized,
12,468,325 and 12,427,280 shares issued and outstanding as
of 12/26/17 and 09/26/17, respectively
   
12
     
12
 
Capital contributed in excess of par value
   
59,057
     
58,939
 
Accumulated deficit
   
(24,963
)
   
(24,380
)
Total Good Times Restaurants Inc. stockholders' equity
   
34,106
     
34,571
 
                 
Non-controlling interests
   
2,630
     
2,713
 
Total stockholders’ equity
   
36,736
     
37,284
 
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
53,493
   
$
55,153
 
 
 
 
See accompanying notes to condensed consolidated financial statements
 
 
Good Times Restaurants Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands except share and per share data)
 
   
Quarter Ended
 
   
Dec 26,2017
   
Dec 27,2016
 
NET REVENUES:
           
Restaurant sales
 
$
22,597
   
$
16,386
 
Franchise royalties
   
163
     
169
 
Total net revenues
   
22,760
     
16,555
 
                 
RESTAURANT OPERATING COSTS:
               
Food and packaging costs
   
7,203
     
5,155
 
Payroll and other employee benefit costs
   
8,279
     
5,995
 
Restaurant occupancy costs
   
1,640
     
1,294
 
Other restaurant operating costs
   
2,116
     
1,528
 
Preopening costs
   
577
     
351
 
Depreciation and amortization
   
846
     
630
 
Total restaurant operating costs
   
20,661
     
14,953
 
                 
General and administrative costs
   
1,917
     
1,645
 
Advertising costs
   
507
     
412
 
Franchise costs
   
10
     
24
 
Gain on restaurant asset sales
   
(8
)
   
(6
)
                 
LOSS FROM OPERATIONS
   
(327
)
   
(473
)
                 
OTHER INCOME (EXPENSES):
               
Interest income (expense), net
   
(83
)
   
(20
)
Total other income (expenses), net
   
(83
)
   
(20
)
                 
NET LOSS
 
(410
)
 
(493
)
                 
Income attributable to non-controlling interests
 
(173
)
 
(140
)
                 
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
 
(583
)
 
(633
)
                 
BASIC AND DILUTED LOSS PER SHARE:
               
Net loss attributable to common shareholders
 
(.05
)
 
(.05
)
                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
               
Basic and Diluted
   
12,444,748
     
12,288,365
 
 
 
 
See accompanying notes to condensed consolidated financial statements
 
 
Good Times Restaurants Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
   
Fiscal Year to Date
 
   
Dec 26, 2017
   
Dec 27, 2016
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
 
$
(410
)
 
$
(493
)
                 
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
               
Depreciation and amortization
   
908
     
673
 
                 
Accretion of deferred rent
   
113
     
120
 
                 
Amortization of lease incentive obligation
   
(95
)
   
(62
)
                 
Stock-based compensation expense
   
118
     
199
 
                 
Recognition of deferred gain on sale of restaurant building
   
(8
)
   
(6
)
Changes in operating assets and liabilities:
               
Change in:
               
Receivables and prepaids
   
(70
)
   
(140
)
Inventories
   
(35
)
   
(16
)
Deposits and other assets
   
80
     
(47
)
Change in:
               
Accounts payable
   
(122
)
   
(354
)
Deferred liabilities
   
353
     
278
 
Accrued and other liabilities
   
(563
)
   
(504
)
Net cash provided by (used in) operating activities
   
269
     
(352
)
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Payments for the purchase of property and equipment
   
(1,947
)
   
(2,425
)
Proceeds from sale leaseback transaction
   
1,397
     
0
 
Payments received from franchisees and others
   
3
     
3
 
Net cash used in investing activities
   
(547
)
   
(2,422
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Borrowings on notes payable and long-term debt
   
900
     
0
 
Principal payments on notes payable and long-term debt
   
(1,404
)
   
(7
)
Net contributions (distributions) paid to non-controlling interests
   
(256
)
   
(32
)
Net cash used in financing activities
   
(760
)
   
(39
)
                 
NET CHANGE IN CASH AND CASH EQUIVALENTS
   
(1,038
)
   
(2,813
)
                 
CASH AND CASH EQUIVALENTS, beginning of period
   
4,337
     
6,330
 
                 
CASH AND CASH EQUIVALENTS, end of period
 
$
3,299
   
$
3,517
 
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
               
Cash paid for interest
 
$
68
   
$
1
 
Change in accounts payable attributable to the purchase of
property and equipment
 
$
(456
)
 
$
1,844
 
 
 
 
See accompanying notes to condensed consolidated financial statements
 
 
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. and its wholly-owned subsidiaries, Good Times Drive Thru, Inc. (“Drive Thru”), BD of Colorado, LLC (“BD of Colo”), Bad Daddy’s Franchise Development, LLC (“BDFD”) and Bad Daddy’s International, LLC (“BDI”) (together referred to as the “Company”, “we” or “us”).  All significant intercompany balances and transactions have been eliminated in consolidation.
  
Drive Thru is engaged in the business of developing, owning, operating and franchising hamburger-oriented drive-through restaurants under the name Good Times Burgers & Frozen Custard.  Most of our Good Times restaurants are located in the front-range communities of Colorado, but we also have franchised restaurants in Wyoming.  BD of Colo, BDI and BDFD are engaged in the business of licensing, owning and operating full-service hamburger-oriented restaurants under the name Bad Daddy’s Burger Bar.
  
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 December 26, 2017 and the results of its operations and its cash flows for the fiscal quarters ended December 26, 2017 and December 27, 2016. Operating results for the fiscal quarter ended December 26, 2017 are not necessarily indicative of the results that may be expected for the year ending September 25, 2018. The condensed consolidated balance sheet as of September 26, 2017 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 26, 2017.
  
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 comprise 13 weeks.  The additional week in a 53-week fiscal year is added to the first quarter, making such quarter consist of 14 weeks.
 
Advertising Costs – We utilize Advertising Funds to administer certain advertising programs for both the Good Times and Bad Daddy’s brands that benefit both us and our franchisees.   We and our franchisees are required to contribute a percentage of gross sales to the fund.  As the contributions to these funds are designated and segregated for advertising, we act as an agent for the franchisees with regard to these contributions.  We consolidate the Advertising Funds into our financial statements on a net basis, whereby contributions from franchisees, when received, are recorded as offsets to reported advertising expenses.  Contributions to the Advertising Funds from our franchisees were $87,000 in each of the first fiscal quarters of 2018 and 2017.
 
 
Note 2.
Goodwill and Intangible Assets
   
The following table presents goodwill and intangible assets as of December 26, 2017 and September 26, 2017 (in thousands):
 
   
December 26, 2017
   
September 26, 2017
 
   
Gross
Carrying
Amount
   
Accumulated
Amortization
   
Net
Carrying
Amount
   
Gross
Carrying
Amount
   
Accumulated
Amortization
   
Net
Carrying
Amount
 
Intangible assets subject to
amortization
                                   
Franchise rights
   
116
     
(64
)
   
52
     
116
     
(57
)
   
59
 
Non-compete agreements
   
15
     
(14
)
   
1
     
15
     
(13
)
   
2
 
   
$
131
   
$
(78
)
 
$
53
   
$
131
   
$
(70
)
 
$
61
 
Indefinite-lived intangible
assets:
                                               
Trademarks
 
$
3,900
   
$
0
   
$
3,900
   
$
3,900
   
$
0
   
$
3,900
 
Intangible assets, net
 
$
4,031
   
$
(78
)
 
$
3,953
   
$
4,031
   
$
(70
)
 
$
3,961
 
                                                 
Goodwill
 
$
15,150
   
$
0
   
$
15,150
   
$
15,150
   
$
0
   
$
15,150
 
 
The Company had no goodwill impairment losses in the periods presented in the above table or any prior periods.
 
There were no impairments to intangible assets during the quarter ended December 26, 2017.  The aggregate amortization expense related to these intangible assets subject to amortization was $7,000 for the quarter ended December 26, 2017. 
  
The estimated aggregate future amortization expense as of December 26, 2017 is as follows (in thousands):
 
Remainder of 2018
 
$
18
 
2019
   
23
 
2020
   
12
 
   
$
53
 
 
Note 3.
Common Stock
  
On January 26, 2015, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC") which was declared effective by the SEC on March 25, 2015. The registration statement allows the Company to issue common stock from time to time up to an aggregate amount of $75 million, of which $22,688,052 has been issued.
    
Note 4.
Stock-Based Compensation
  
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 loss for the quarters ended December 26, 2017 and December 27, 2016 includes $118,000 and $199,000, respectively, of compensation costs related to our stock-based compensation arrangements.
     
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 that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options and stock awards granted during the first fiscal quarter ended December 26, 2017. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive equity awards.
 
During the quarter ended December 26, 2017, the Company granted a total of 12,963 incentive stock options, from available shares under its 2008 Plan, as amended, with an exercise price of $2.70 and a per-share weighted average fair value of $1.95.
 
 
During the quarter ended December 27, 2016, the Company granted a total of 149,899 incentive stock options, from available shares under its 2008 Plan, as amended, with exercise prices between of $3.05 and $3.15 and per-share weighted average fair values between $2.17 and $2.30.
 
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:
 
   
Quarter Ended 12/26/17
Incentive and
Non-Statutory Stock Options
   
Quarter Ended 12/27/16
Incentive and
Non-Statutory Stock Options
 
Expected term (years)
 
7.5
   
6.5 to 7.5
 
Expected volatility
 
75.67%
 
75.66% to 80.70%
 
Risk-free interest rate
 
2.17%
 
 
1.49% to 2.40%
 
Expected dividends
 
0
   
0
 
 
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 the United States treasury yields in effect at the time of grant corresponding with the expected term of the options. The expected option term is the number of years we estimate that options will be outstanding prior to exercise considering vesting schedules and our historical exercise patterns.
 
The following table summarizes stock option activity for the quarter ended December 26, 2017 under all plans:
  
   
Shares
   
Weighted
Average
Exercise Price
   
Weighted Avg.
Remaining
Contractual Life (Yrs.)
 
Outstanding-at beginning of year
   
681,922
   
$
4.25
       
Options granted
   
12,963
   
$
2.70
       
Options exercised
   
0
               
Forfeited
   
(2,970
)
 
$
4.04
       
Expired
   
(2,933
)
 
$
17.25
       
Outstanding December 26, 2017
   
688,982
   
$
4.17
   
6.5
 
Exercisable December 26, 2017
   
467,207
   
$
3.94
   
5.7
 
 
As of December 26, 2017, the aggregate intrinsic value of the outstanding and exercisable options was $58,000 and $58,000, respectively. Only options whose exercise price is below the current market price of the underlying stock are included in the intrinsic value calculation.
 
As of December 26, 2017, the total remaining unrecognized compensation cost related to non-vested stock options was $485,000 and is expected to be recognized over a weighted average period of approximately 1.8 years.
 
There were no stock options exercised during the quarters ended December 26, 2017 and December 27, 2016.
 
Restricted Stock Grants
 
During the quarter ended December 26, 2017, the Company granted a total of 37,037 shares of restricted stock from available shares under its 2008 Plan, as amended. The shares were issued with a grant date fair market value of $2.70 which is equal to the closing price of the stock on the date of the grant. The restricted stock grant vests over three years following the grant date.
 
During the quarter ended December 27, 2016, the Company granted a total of 101,094 shares of restricted stock from available shares under its 2008 Plan, as amended. The shares were issued with a grant date fair market value of $3.15 which is equal to the closing price of the stock on the date of the grant. The restricted stock grant vests over three years following the grant date.
 
 
A summary of the status of non-vested restricted stock as of December 26, 2017 is presented below.
 
   
Shares
   
Grant Date Fair
Value Per Share
 
Non-vested shares at beg of year
   
115,039
   
$
3.15 to $8.60
 
Granted
   
37,037
   
$
2.70
 
Vested
   
(41,038
)
 
$
3.15 to $4.18
 
Non-vested shares at December 26, 2017
   
111,038
   
$
2.70 to $8.60
 
 
As of December 26, 2017, there was $314,000 of total unrecognized compensation cost related to non-vested restricted stock. This cost is expected to be recognized over a weighted average period of approximately 1.4 years.
    
Note 5.
Notes Payable and Long-Term Debt
    
Cadence Credit Facility
 
On September 8, 2016, the Company entered into a credit agreement with Cadence Bank (“Cadence”) pursuant to which Cadence agreed to loan the Company up to $9,000,000 (the “Cadence Credit Facility”).  On September 11, 2017, the Cadence Credit Facility was amended to increase the loan maximum to $12,000,000 and extend the maturity date to December 31, 2020. The Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%.  All borrowings under the Cadence Credit Facility bear interest at a variable rate based upon the Company’s election of (i) 3.0% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.125% floor, plus 4.0%.  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. As of December 26, 2017, the weighted average interest rate applicable to borrowings under the Cadence Credit Facility was 5.6456%.
     
The Cadence Credit Facility contains certain affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants setting a maximum leverage ratio of 5.35:1, a minimum fixed charge coverage ratio of 1.25:1 and minimum liquidity of $2,500,000. As of December 26, 2017, the Company was in compliance with its covenants.
    
As a result of entering into the Cadence Credit Facility and the amendment, the Company paid loan origination costs including professional fees of approximately $197,000 and will amortize these costs over the term of the credit agreement.
   
The obligations under the Cadence Credit Facility are collateralized by a first priority lien on substantially all of the Company’s assets. 
 
As of December 26, 2017, the outstanding balance on the facility was $4,800,000.
    
Note 6.
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 grants 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. Options and restricted stock grants for 800,020 and 984,718 shares of common stock were not included in computing diluted EPS for the quarters ended December 26, 2017 and December 27, 2016, respectively, because their effects were anti-dilutive.
 
Note 7.
Contingent Liabilities and Liquidity
  
We remain contingently liable on various leases underlying restaurants that were previously sold to franchisees.  We have never experienced any losses related to these contingent lease liabilities, however if a franchisee defaults on the payments under the leases, we would be liable for the lease payments as the assignor or sub-lessor of the lease.  Currently we have not been notified nor are we aware of any leases in default by the franchisees, however there can be no assurance that there will not be in the future which could have a material effect on our future operating results.
 
 
Note 8.
Impairment of Long-Lived Assets and Goodwill
 
Long-Lived Assets. We review our long-lived assets for impairment, including land, property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the capitalized costs of the assets to the future undiscounted net cash flows expected to be generated by the assets and the expected cash flows are based on recent historical cash flows at the restaurant level (the lowest level that cash flows can be determined).
 
Given the results of our impairment analysis at December 26, 2017, there are no restaurants which are impaired.
 
Trademarks. Trademarks have been determined to have an indefinite life.  We evaluate our trademarks for impairment annually and on an interim basis as events and circumstances warrant by comparing the fair value of the trademarks with their carrying amount. There was no impairment required to the acquired trademarks as of December 26, 2017 and December 27, 2016.
 
Goodwill. 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.  As of December 26, 2017, the Company had $96,000 of goodwill associated with the Good Times reporting unit and $15,054,000 of goodwill associated with its Bad Daddy’s reporting unit.  No goodwill impairment charges were recognized as of December 26, 2017 and December 27, 2016.
     
Note 9.
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 the 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. The deferred tax assets are reviewed periodically for recoverability and valuation allowances are adjusted as necessary.
 
The Company has significant net operating loss carry-forwards from prior years and incurred additional net operating losses during the quarters ended December 26, 2017 and December 27, 2016.  These losses resulted in an increase in the related deferred tax assets; however, valuation allowances were provided which reduced these deferred tax assets to zero; therefore, no income tax provision or benefit was recognized for the quarters ended December 26, 2017 and December 27, 2016 resulting in an effective income tax rate of 0% for both periods.
 
The Company is subject to taxation in various jurisdictions. The Company continues to remain subject to examination by U.S. federal authorities for the years 2014 through 2017. The Company believes that its income tax filing positions and deductions will be sustained on 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 December 26, 2017.
 
Note 10.
Non-controlling Interests
 
Non-controlling interests are presented as a separate item in the stockholders’ 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 that do not result 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 members are shown on the accompanying consolidated balance sheet in the stockholders’ equity section as a non-controlling interest and is adjusted each period to reflect the limited partners’ and members’ share of the net income or loss as well as any cash contributions or distributions to or from the limited partners and members for the period. The limited partners’ and members’ share of the net income or loss in the subsidiary is shown as non-controlling interest income or expense 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 quarter ended December 26, 2017 (in thousands):
 
   
Good Times
   
Bad Daddy’s
   
Total
 
Balance at September 26, 2017
 
$
434
   
$
2,279
   
$
2,713
 
Income
   
79
     
94
     
173
 
Distributions
   
(94
)
   
(162
)
   
(256
)
Balance at December 26, 2017
 
$
419
   
$
2,211
   
$
2,630
 
 
Our non-controlling interests consist of one joint venture partnership involving seven Good Times restaurants and six joint venture partnerships involving six Bad Daddy’s restaurants. Three of the six Bad Daddy’s joint venture partnerships were established in fiscal 2016 and fiscal 2017 to fund the construction of Bad Daddy’s restaurants in North Carolina. Two of the restaurants opened in fiscal 2017 and one opened in October 2017.
 
Note 11.
Recent Accounting Pronouncements
 
In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” (ASU 2016-09).   ASU 2016-09 includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The areas for simplification include income tax consequences, forfeitures, classification of awards as either equity or liabilities and classification on the statement of cash flows. In May 2017, the FASB issued ASU No. 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.”  This pronouncement provides clarity in guidance in the instance of a change in the terms or conditions of a share-based payment award.  Both pronouncements are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016 and early adoption is permitted for financial statements that have not been previously issued. The Company adopted both ASUs effective with its 2018 fiscal year; such adoption did not have material impact on our financial position or results from operations.
 
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).”  This update was issued to replace the current revenue recognition guidance, creating a more comprehensive five-step model.  In March 2016, the FASB issued No. ASU 2016-04, “Liabilities – Extinguishments of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products.”  This pronouncement provides guidance for the derecognition of prepaid stored-value product liabilities, consistent with the breakage guidance in Topic 606.  These amendments are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years.  We do not expect that the adoption of these new standards will have a material impact to our revenue recognition related to company-owned restaurant sales, recognition of royalty fees from our franchise agreement, or impact from recognition of gift card breakage.
 
In February 2016, the Financial Accounting Standards Board (“FASB”) FASB issued Accounting Standards Update No. ASU No. 2016-02, “Leases (Topic 842)”, (ASU 2016-02), which replaces the existing guidance in Accounting Standard Codification 840, Leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASU 2016-02 This pronouncement requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. The Company is currently assessing the impact that adoption of ASU 2016-02 will have on its consolidated financial position or results of operations, but expect that it will result in a significant increase in our long-term assets and liabilities given we have a significant number of leases.
 
In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment,” which eliminates Step 2 from the impairment test applied to goodwill.  Under the new standard, goodwill impairment tests will compare the fair value of a reporting unit with its carrying amount.  An impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill.  This pronouncement is effective for annual and interim periods beginning after December 15, 2019 and should be applied on a prospective basis.  We do not expect that the adoption of this standard will have a material impact on our financial position or results from operations.
 
 
Note 12.
Subsequent Events
 
On January 30, 2018 the Company closed one Good Times restaurant in Aurora, Colorado. A non-cash impairment charge of $219,000 related to this restaurant was previously taken in the fiscal year ended September 26, 2017 and no additional loss from disposal of assets is expected. The Company is currently analyzing subleasing opportunities to offset the remaining lease costs over the approximate 17 remaining years of the lease.
 
Note 13.
Segment Reporting
 
All of our Good Times Burgers and Frozen Custard restaurants (Good Times) compete in the quick-service drive-through dining industry while our Bad Daddy’s Burger Bar restaurants (Bad Daddy’s) compete in the full-service upscale casual 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 (loss) 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
 
   
Dec 26, 2017
   
Dec 27, 2016
 
Revenues
           
Good Times
 
$
7,688
   
$
6,952
 
Bad Daddy’s
   
15,072
     
9,603
 
   
$
22,760
   
$
16,555
 
Loss from operations
               
Good Times
 
$
(19
)
 
$
(111
)
Bad Daddy’s
   
(190
)
   
(190
)
Corporate
   
(118
)
   
(172
)
   
$
(327
)
 
$
(473
)
Capital expenditures
               
Good Times
 
$
20
   
$
953
 
Bad Daddy’s
   
1,926
     
1,441
 
Corporate
   
1
     
31
 
   
$
1,947
   
$
2,425
 

   
Dec 26, 2017
   
Sep 26, 2017
 
Property and equipment, net
           
Good Times
 
$
5,635
   
$
7,061
 
Bad Daddy’s
   
22,961
     
22,133
 
Corporate
   
474
     
496
 
   
$
29,070
   
$
29,690
 
 
 
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 the disclosure of risk factors in the Company’s form 10-K for the fiscal year ended September 26, 2017.  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)
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.
 
(II)
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.
 
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; 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 26, 2017.
 
Overview.
 
Good Times Restaurant Inc., through its subsidiaries (collectively, the “Company” or “we”, “us” or “our”) operates and franchises hamburger-oriented drive-through restaurants under the name Good Times Burgers & Frozen Custard (Good Times) and operates and franchises/licenses full service hamburger-oriented restaurants under the name Bad Daddy’s Burger Bar (Bad Daddy’s).
 
We are focused on continuing to improve the profitability of Good Times and developing additional Good Times restaurants in our home state of Colorado while developing the Bad Daddy’s concept with additional company-owned restaurants in North Carolina, Oklahoma, Georgia, and Tennessee, in addition to other markets in the U.S., allowing us to leverage the strength and opportunities of both brands.
 
Growth Strategies and Outlook.
 
We believe there are significant opportunities to develop new units, grow customer traffic and increase awareness of our brands.  The following sets for the key elements of our growth strategy:
 
·
Pursue disciplined growth of company-owned and joint venture Bad Daddy’s restaurants
·
Remodel/refresh our Good Times restaurants
·
Expand the number of Good Times locations
·
Increase same-store sales in both brands
·
Leverage our infrastructure
 
 
Restaurant locations.
 
As of December 26, 2017, we operate or franchise a total of thirty-eight Good Times restaurants and twenty-six Bad Daddy’s restaurants.  The following table presents the number of restaurants operating at the end of the first fiscal quarters of 2018 and 2017.
 
   
Company-Owned/Co-Developed/Joint Venture
 
State
 
Good Times Burgers
& Frozen Custard
   
Bad Daddy's
Burger Bar
   
Total
 
   
20181
   
2017
   
2018
   
2017
   
2018
   
2017
 
Colorado
   
28
     
27
     
12
     
10
     
40
     
37
 
Oklahoma
   
0
     
0
     
1
     
0
     
1
     
0
 
North Carolina
   
0
     
0
     
11
     
7
     
11
     
7
 
Total:
   
28
     
27
     
24
     
17
     
52
     
44
 
 
1
One restaurant opened in Greeley, CO in Q2 2017.
2
Seven restaurants opened between Q2 2017 and Q1 2018: Johnstown and Arvada (CO); Norman (OK); and Fayetteville, Olive Park, Christenbury, and Greenville (NC).

   
Franchise/License
 
State
 
Good Times Burgers
& Frozen Custard
   
Bad Daddy's
Burger Bar
   
Total
 
   
2018
   
2017
   
20183
   
2017
   
2018
   
2017
 
Colorado
   
8
     
8
     
0
     
0
     
8
     
8
 
North Carolina1
   
0
     
0
     
1
     
1
     
1
     
1
 
South Carolina
   
0
     
0
     
1
     
1
     
1
     
1
 
Tennessee3
   
0
     
0
     
0
     
1
     
0
     
1
 
Wyoming2
   
2
     
2
     
0
     
0
     
2
     
2
 
Total:
   
10
     
10
     
2
     
3
     
12
     
13
 
 
1
One North Carolina location, at the Charlotte Douglas International Airport, is operated pursuant to a License Agreement.
2
The two restaurants in Wyoming are “dual brand” concept restaurants operated by a franchisee of both Good Times and Taco John’s.
3
Our franchisee closed the Knoxville, Tennessee location in February 2017.
 
Results of Operations
 
The following presents certain historical financial information of our operations.  This financial information includes results for our first fiscal quarters ended December 26, 2017 and December 27, 2017.
 
Net Revenues. Net revenues for the quarter ended December 26, 2017 increased $6,205,000 or 37.5% to $22,760,000 from $16,555,000 for the quarter ended December 27, 2016.  Bad Daddy’s concept revenues increased $5,469,000 while our Good Times concept revenues increased $736,000.
 
Good Times restaurant sales increased $735,000 to $7,610,000 for the quarter ended December 26, 2017 from $6,875,000 for the quarter ended December 27, 2016. Good Times same store restaurant sales increased 5.9% during the quarter ended December 26, 2017 compared to the same prior year quarter. Restaurants are included in same store sales after they have been open a full fifteen months.  Restaurant sales increased from the prior quarter due to the same store sales increase and the opening of one new restaurant in March 2017.  The average menu price increase for the quarter ended December 26, 2017 over the same prior year quarter was approximately 4.0%.  Franchise revenues increased $1,000 for the quarter ended December 26, 2017 due to an increase in restaurant sales at the franchise locations.
 
Bad Daddy’s restaurant sales increased $5,476,000 to $14,987,000 for the quarter ended December 26, 2017 from $9,511,000 for the quarter ended December 27, 2016, primarily attributable to the six new restaurants opened in fiscal 2017 and the two new restaurants opened in the first fiscal quarter of 2018. Bad Daddy’s same store restaurant sales increased 0.7% during the quarter ended December 26, 2017 compared to the same prior year quarter. Excluding the Cherry Creek location which continues to be severely impacted by construction in the surrounding area, Bad Daddy’s same store sales increased 1.3% during the quarter ended December 26, 2017. Bad Daddy’s restaurants are included in same store sales after they have been open a full eighteen months.  The average menu price increase for the quarter ended December 26, 2017 over the same prior year quarter was approximately 2.9%.  There were fourteen restaurants included in the same store sales base at the end of the quarter. Additionally, net revenues were reduced by $7,000 of lower franchise royalties and license fees compared to the prior year quarter.
 
 
Restaurant Operating Costs.
 
Food and Packaging Costs. Food and packaging costs for the quarter ended December 26, 2017 increased $2,148,000 to $7,203,000 (31.9% of restaurant sales) from $5,155,000 (31.5% of restaurant sales) for the quarter ended December 27, 2016.
 
Good Times food and packaging costs were $2,571,000 (33.8% of restaurant sales) for the quarter ended December 26, 2017, up from $2,211,000 (32.2% of restaurant sales) for the quarter ended December 27, 2016. Following significant increases in commodity costs during our third and fourth quarters of fiscal 2017, we experienced modest declines in commodity costs, which were offset by increased purchase incidence of our promotionally-priced kids meals during the first quarter of Fiscal 2018.  The cost index on our weighted basket of goods was approximately 6.5% higher than the prior year, impacting our food and packaging costs as a percentage of restaurant sales by approximately 2.1%.
 
Bad Daddy’s food and packaging costs were $4,632,000 (30.9% of restaurant sales) for the quarter ended December 26, 2017, up from $2,944,000 (31.0% of restaurant sales) for the quarter ended December 27, 2016.
 
Payroll and Other Employee Benefit Costs. Payroll and other employee benefit costs for the quarter ended December 26, 2017 increased $2,284,000 to $8,279,000 (36.6% of restaurant sales) from $5,995,000 (36.6% of restaurant sales) for the quarter ended December 27, 2016.
 
Good Times payroll and other employee benefit costs were $2,685,000 (35.3% of restaurant sales) in the quarter ended December 26, 2017, up from $2,399,000 (34.9% of restaurant sales) in the same prior year period. $119,000 of the $286,000 increase in payroll and other employee benefit expenses was attributable to the new Good Times restaurant that opened in March 2017. The remaining $168,000 of the increase is primarily due to the increase in restaurant sales and an increase in the average wage paid to our employees, which increased approximately 8.6% in the quarter ended December 26, 2017 compared to the same prior year period. This average wage increase is attributable to a very competitive labor market in Colorado and statutory increases in the minimum wage rate.
 
Bad Daddy’s payroll and other employee benefit costs were $5,594,000 (37.3% of restaurant sales) for the quarter ended December 26, 2017 up from $3,596,000 (37.8% of restaurant sales) in the same prior year period. The $1,998,000 increase was primarily attributable to the six new restaurants opened in fiscal 2017 and the two new restaurants opened in the first fiscal quarter of 2018.  The decrease of 0.5% in payroll and other employee benefit costs as a percentage of restaurant sales was mainly due to a higher percentage of restaurants outside of Colorado than last year, states in which there is a lower statutory minimum wage for tipped employees as compared to Colorado.
 
Occupancy Costs. Occupancy costs for the quarter ended December 26, 2017 increased $346,000 to $1,640,000 (7.3% of restaurant sales) from $1,294,000 (7.9% of restaurant sales) for the quarter ended December 27, 2016.
 
Good Times occupancy costs were $701,000 (9.2% of restaurant sales) in the quarter ended December 26, 2017, up from $666,000 (9.7% of restaurant sales) in the same prior year period. The increase was primarily attributable to the new Good Times restaurant that opened in March 2017.
 
Bad Daddy’s occupancy costs were $939,000 (6.3% of restaurant sales) for the quarter ended December 26, 2017 up from $628,000 (6.6% of restaurant sales) in the same prior year period. The $311,000 increase was primarily attributable to the six new restaurants opened in fiscal 2017 and the two new restaurants opened in the first fiscal quarter of 2018.
 
Other Operating Costs. Other operating costs for the quarter ended December 26, 2017, increased $588,000 to $2,116,000 (9.4% of restaurant sales) from $1,528,000 (9.3% of restaurant sales) for the quarter ended December 27, 2016.
 
Good Times other operating costs were $649,000 (8.5% of restaurant sales) in the quarter ended December 26, 2017, up from $606,000 (8.8% of restaurant sales) in the same prior year period. The increase was primarily attributable to the new Good Times restaurant that opened in March 2017 as well as increases in repairs and maintenance and bank credit card fees.
 
 
Bad Daddy’s other operating costs were $1,467,000 (9.8% of restaurant sales) for the quarter ended December 26, 2017 up from $922,000 (9.7% of restaurant sales) in the same prior year period. The $545,000 increase was primarily attributable to the six new restaurants opened in fiscal 2017 and the two new restaurants opened in the first fiscal quarter of 2018.
 
New Store Preopening Costs. In the quarter ended December 26, 2017, we incurred $577,000 of preopening costs compared to $351,000 for the quarter ended December 27, 2016.
 
Good Times preopening costs were $0 for the quarter ended December 26, 2017 compared to $3,000 in the same prior year period.  The prior year costs were related to a new restaurant that opened in March 2017.
 
Bad Daddy’s preopening costs were $577,000 for the quarter ended December 26, 2017 compared to $348,000 in the same prior year period. Preopening costs in the current quarter are primarily attributable to two restaurants that opened in North Carolina during the quarter and one restaurant that opened in Georgia subsequent to the end of the quarter.  In the prior-year period, pre-opening costs are related to the Bad Daddy’s restaurants opened during 2017 in Colorado and North Carolina.
 
Depreciation and Amortization Costs. Depreciation and amortization costs for the quarter ended December 26, 2017 increased $216,000 to $846,000 from $630,000 for the quarter ended December 27, 2016.
 
Good Times depreciation costs increased $46,000 from $180,000 in the same prior year period to $226,000 in the quarter ended December 26, 2017.
 
Bad Daddy’s depreciation costs increased $170,000 from $450,000 in the same prior year period to $620,000 in the quarter ended December 26, 2017. The $170,000 increase was primarily attributable to the six new restaurants opened in fiscal 2017 and the two new restaurants opened in the first fiscal quarter of 2018.
 
General and Administrative Costs. General and administrative costs for the quarter ended December 26, 2017, increased $272,000 to $1,917,000 (8.4% of total revenue) from $1,645,000 (9.9% of total revenues) for the quarter ended December 27, 2016.
 
The $272,000 increase in general and administrative expenses in the quarter ended December 26, 2017 is primarily attributable to:
 
·
Increase in salaries, wages, and employee benefit costs of $129,000
·
Decrease in incentive stock compensation cost of $81,000
·
Increase in professional fees of $68,000 primarily attributable to legal expenses related to the Company’s response to SEC filings by shareholders affiliated with two former directors
·
Increase in our corporate office rent of $35,000
·
Increase in payroll processing fees of $28,000
·
Net increases in all other expenses of $93,000
  
Total general and administrative costs will continue to increase as we build up our infrastructure to support the growth of both of our brands, however we anticipate they will continue to decrease as a percentage of revenue as additional restaurants are developed.
 
Advertising Costs. Advertising costs for the quarter ended December 26, 2017, increased $95,000 to $507,000 (2.2% of restaurant sales) from $412,000 (2.5% of restaurant sales) for the quarter ended December 27, 2016.
 
Good Times advertising costs were $347,000 (4.6% of restaurant sales) in the quarter ended December 26, 2017 compared to $312,000 (4.5% of restaurant sales) in the same prior year period.
 
Bad Daddy’s advertising costs were $160,000 (1.1% of restaurant sales) in the quarter ended December 26, 2017 compared to $100,000 (1.1% of restaurant sales) in the same prior year period. The $60,000 increase was primarily attributable to the six new restaurants opened in fiscal 2017 and the two new restaurants opened in the first fiscal quarter of 2018.
 
 
Good Times advertising costs consists primarily of contributions made to the advertising materials fund and a regional advertising cooperative based on a percentage of restaurant sales. We anticipate that for the balance of fiscal 2018 Good Times advertising costs will remain consistent as a percentage of restaurant sales and will consist primarily of cable television advertising, social media and on-site and point-of-purchase merchandising totaling approximately 4.5% of restaurant sales.
 
Bad Daddy’s advertising costs consist primarily of contributions made to the advertising materials fund based on a percentage of restaurant sales as well as local store marketing efforts.
 
Franchise Costs. In the quarter ended December 26, 2017, we incurred $10,000 of franchise costs compared to $24,000 for the quarter ended December 27, 2016.
 
The costs are primarily related to the Good Times franchised restaurants.
 
Gain on Restaurant Asset Disposals. The gain on restaurant asset disposals for the quarter ended December 26, 2017 was $8,000 compared to a gain of $6,000 for the quarter ended December 27, 2016.
 
The gain in both periods is primarily related to the deferred gains on previous sale lease-back transactions on two Good Times restaurants.
 
Loss from Operations. The loss from operations was $327,000 in the quarter ended December 26, 2017 compared to a loss from operations of $473,000 for the quarter ended December 27, 2016.
 
The change in income from operations for the quarter ended December 26, 2017 is due primarily to matters discussed in the "Net Revenues”, “Restaurant Operating Costs" and "General and Administrative Costs" sections above.
 
Net Loss. The net loss was $410,000 for the quarter ended December 26, 2017 compared to a net loss of $493,000 for the quarter ended December 27, 2016.
 
The change from the quarter ended December 27, 2016 to the quarter ended December 26, 2017 was primarily attributable to the matters discussed in the "Net Revenues", "Restaurant Operating Costs" and "General and Administrative Costs", as well as an increase in net interest expense of $63,000 for the quarter ended December 26, 2017 compared to the same prior year period.
 
Income Attributable to Non-Controlling Interests. For the quarter ended December 26, 2017, the income attributable to non-controlling interests was $173,000 compared to $140,000 for the quarter ended December 27, 2016.
 
The non-controlling interest represents the limited partners’ or members’ share of income in the Good Times and Bad Daddy’s joint venture restaurants. $79,000 of the current year income is attributable to the Good Times joint venture restaurants, compared to $87,000 in the same prior year period. $94,000 of the current year income is attributable to the BDI joint venture restaurants, compared to $53,000 in the same prior year period.  This $41,000 increase is primarily due to a greater number of joint venture store operating weeks in the current quarter compared to the same prior year period.
 
Adjusted EBITDA
 
EBITDA is defined as net income (loss) 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 supplementally.  You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
 
The following table reconciles net loss to EBITDA and Adjusted EBITDA (in thousands) for the fiscal quarters:
 
   
Quarter Ended
 
   
Dec 26, 2017
   
Dec 27, 2016
 
Adjusted EBITDA:
           
Net loss, as reported
 
$
(583
)
 
$
(633
)
Depreciation and amortization
   
809
     
602
 
Interest expense
   
84
     
20
 
EBITDA
   
310
     
(11
)
Preopening expense
   
485
     
293
 
Non-cash stock based compensation
   
118
     
199
 
GAAP rent in excess of cash rent
   
(28
)
   
(3
)
Non-cash disposal of asset
   
(8
)
   
(6
)
Adjusted EBITDA
 
$
877
   
$
472
 
 
Liquidity and Capital Resources
 
Cash and Working Capital: As of December 26, 2017, we had a working capital deficit of $738,000. 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 several days of the related sale, and we typically have two to four weeks to pay our vendors.  This benefit may increase when new Bad Daddy’s and Good Times restaurants are opened.  We believe that with our ability to access the Cadence Bank credit facility in addition to cash flow generated from our existing restaurants, that we will have sufficient capital to meet our working capital, long term debt obligations and recurring capital expenditure needs in fiscal 2018.  As of December 26, 2017, we had total commitments outstanding of $1,198,000 related to construction contracts for Bad Daddy’s restaurants currently under development.  We anticipate these commitments will be funded out of existing cash or future borrowings against the Cadence Bank credit facility.
 
 
Financing:
 
Cadence Credit Facility: On September 8, 2016, the Company entered into a credit agreement with Cadence Bank (“Cadence”) pursuant to which Cadence agreed to loan the Company up to $9,000,000 (the “Cadence Credit Facility”).  On September 11, 2017, the Cadence Credit Facility was amended to increase the loan maximum to $12,000,000 and extend the maturity date to December 31, 2020. The Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%.  All borrowings under the Cadence Credit Facility bear interest at a variable rate based upon the Company’s election of (i) 3.0% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.125% floor, plus 4.0%.  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. As of December 26, 2017, the weighted average interest rate applicable to borrowings under the Cadence Credit Facility was 5.6456%.
 
The Cadence Credit Facility contains certain affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants setting a maximum leverage ratio of 5.35:1, a minimum fixed charge coverage ratio of 1.25:1 and minimum liquidity of $2,500,000. As of December 26, 2017, the Company was in compliance with its covenants.
    
As a result of entering into the Cadence Credit Facility and the amendment, the Company paid loan origination costs including professional fees of approximately $197,000 and will amortize these costs over the term of the credit agreement.
 
The obligations under the Cadence Credit Facility are collateralized by a first priority lien on substantially all of the Company’s assets.
 
As of December 26, 2017, the outstanding balance on the facility was $4,800,000.
 
Capital Expenditures. Planned capital expenditures for the balance of fiscal 2018 include normal recurring capital expenditures for existing Good Times and Bad Daddy’s restaurants, new Bad Daddy’s restaurants and reimage and remodel costs for Good Times restaurants.
 
Assets Held for Sale. On April 28, 2017 the Company purchased the land and building of a company owned Good Times in Brighton, Colorado for $1,179,000. At September 26, 2017 $1,221,000 of assets were classified as assets held for sale in the accompanying consolidated balance sheet. We finalized a sale lease-back transaction in November 2017 with proceeds of $1,397,000. The resulting gain of $170,000 on the transaction was deferred and will be recognized over the life of the fifteen-year lease.
 
Cash Flows. Net cash provided by operating activities was $269,000 for the quarter ended December 26, 2017. The net cash provided by operating activities for the quarter ended December 26, 2017 was the result of a net loss of $410,000 as well as cash and non-cash reconciling items totaling $679,000 (comprised of 1) depreciation and amortization of $908,000, 2) accretion of deferred rent of $113,000, 3) amortization of lease incentive obligations of $95,000, 4) stock-based compensation expense of $118,000, 5) an increase in receivables of $70,000, 6) an increase in deferred liabilities related to tenant allowances of $347,000, 7) a decrease in accounts payable of $122,000, 8) a decrease in accrued liabilities of $563,000 and 8) a net increase in other operating assets and liabilities of $43,000).
 
Net cash used in operating activities was $352,000 for the quarter ended December 27, 2016. The net cash provided by operating activities for the quarter ended December 27, 2016 was the result of a net loss of $493,000 as well as cash and non-cash reconciling items totaling $141,000 (comprised of 1) depreciation and amortization of $673,000, 2) accretion of deferred rent of $120,000, 3) amortization of lease incentive obligations of $62,000, 4) stock-based compensation expense of $199,000, 5) an increase in accounts receivable of $140,000, 6) an increase in deferred liabilities related to tenant allowances of $278,000, 7) a decrease in accounts payable of $354,000, 8) an decrease in accrued liabilities of $504,000 and 8) a net increase in other operating assets and liabilities of $69,000).
 
Net cash used in investing activities for the quarter ended December 26, 2017 was $547,000 which primarily reflects the purchases of property and equipment of $1,947,000 and sale leaseback proceeds of $1,397,000. Purchases of property and equipment comprised primarily of the following:
 
·
$1,644,000 in costs for the development of Bad Daddy’s locations
 
 
·
$283,000 for miscellaneous capital expenditures related to our Bad Daddy’s restaurants
·
$20,000 for miscellaneous capital expenditures related to our Good Times restaurants
 
Net cash used in investing activities for the quarter ended December 27, 2016 was $2,422,000 which primarily reflects the purchases of property and equipment of $2,425,000. Purchases of property and equipment comprised of the following:
 
·
$1,252,000 in costs for the development of Bad Daddy’s locations
·
$188,000 for miscellaneous capital expenditures related to our Bad Daddy’s restaurants
·
$165,000 in costs related to our existing Good Times locations, for reimaging and remodeling
·
$518,000 for the development of one new Good Times location
·
$271,000 for miscellaneous capital expenditures related to our Good Times restaurants
·
$31,000 for miscellaneous capital expenditures related to our corporate office
 
Net cash used in financing activities for the quarter ended December 26, 2017 was $760,000, which includes principal payments on notes payable, long-term debt and capital leases of $1,404,000, borrowings on notes payable and long-term debt of $900,000 and distributions to non-controlling interests of $256,000.
 
Net cash used in financing activities for the quarter ended December 27, 2016 was $39,000, which includes principal payments on notes payable, long term debt and capital leases of $7,000, contributions from non-controlling interests of $206,000 and distributions to non-controlling interests of $238,000.
 
Contingencies. We remain contingently liable on various leases underlying restaurants that were previously sold to franchisees.  We have never experienced any losses related to these contingent lease liabilities, however if a franchisee defaults on the payments under the leases, we would be liable for the lease payments as the assignor or sublessor of the lease.  Currently we have not been notified nor are we aware of any leases in default under which we are contingently liable, however there can be no assurance that there will not be in the future, which could have a material effect on our future operating results.
 
Subsequent Events
 
On January 30, 2018 the Company closed one Good Times restaurant in Aurora, Colorado. A non-cash impairment charge of $219,000 related to this restaurant was previously taken in the fiscal year ended September 26, 2017 and no additional loss from disposal of assets is expected. The Company is currently analyzing subleasing opportunities to offset the remaining lease costs over the approximate 17 remaining years of the lease.
 
Impact of Inflation
 
The total menu price increases taken at our Good Times restaurants during fiscal 2017 were approximately 4.5%, and we have taken an additional 0.5% increase in the first quarter of fiscal 2018.  The total menu increases taken at our Bad Daddy’s restaurants during fiscal 2017 were approximately 2.9%.  We did not take any material menu price increases during the first quarter of fiscal 2018.  Commodity costs rose significantly during the final two fiscal quarters of 2017 but have moderately declined during the first fiscal quarter of 2018.   When combined with anticipated menu price increases, we expect Good Times’ and Bad Daddy’s’ food and packaging costs to remain consistent with the current quarter, or decline slightly as a percentage of sales during the remainder of fiscal 2018.
 
Seasonality
 
Revenues of the Company are subject to seasonal fluctuations based primarily on weather conditions adversely affecting Colorado restaurant sales in December January, February and March.
 
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not required.
 
ITEM 4T.
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 10Q, the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) have concluded that the Company’s disclosure controls and procedures were effective.
 
 
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 December 26, 2017 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
 
The Company is periodically subject to legal proceedings which are incidental to its business.  These legal proceedings are not expected to have a material impact on the Company.
 
ITEM 1A.
RISK FACTORS
 
There have been no material changes from the risk factors previously disclosed in our most recent Annual Report filed with the Securities and Exchange Commission.
 
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
 
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
None.
 
ITEM 4.
MINE SAFETY DISCLOSURES
N/A
 
ITEM 5.
OTHER INFORMATION
None.
 
ITEM 6.
EXHIBITS
 
(a)          Exhibits.  The following exhibits are furnished as part of this report:
 
Exhibit No.
Description
   
*31.1
*31.2
*32.1
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
 
*filed herewith
 
 
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.
 
 
GOOD TIMES RESTAURANTS INC. 
 
       
DATE: February 9, 2018
   
   
Boyd E. Hoback
President and Chief Executive Officer
 
 
 
   
       
 
 
 
 
 
Ryan M. Zink
Chief Financial Officer
 


23

 
EX-31.1 2 ex31_1.htm EXHIBIT 31.1
Exhibit 31.1
 
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
 
I, Boyd E. Hoback, certify that:
 
1.
I have reviewed this quarterly report on 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;
 
4.
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:       February 9, 2018
 

Boyd E. Hoback
President and Chief Executive Officer
 
 
 

EX-31.2 3 ex31_2.htm EXHIBIT 31.2
Exhibit 31.2
 
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
 
I, Ryan M. Zink, certify that:
 
1.
I have reviewed this quarterly report on 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;
 
4.
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:  February 9, 2018
 

Ryan M. Zink
Chief Financial Officer

 

EX-32.1 4 ex32_1.htm EXHIBIT 32.1
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 with the Quarterly Report on Form 10-Q of Good Times Restaurants Inc. (the “Company”) for the period ended June 27, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Boyd E. Hoback, as Chief Executive Officer of the Company, and James K. Zielke as Chief Financial Officer, each hereby certifies, 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.
 
 
Boyd E. Hoback
Ryan M. Zink
 
Chief Executive Officer
Chief Financial Officer
 
February 9, 2018
February 9, 2018
 

 
 

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The aggregate amount of stock value authorized by the SEC to be issued by the S-3 shelf registration statement. Aggregate amount of stock value issued under S Three [Member] Amortization of lease incentive obligation. Bad Daddy's Burger Bar Restaurant [Member]. Bad Daddy''s Franchise Development, LLC [Member] Bad Daddy''s International, LLC [Member] Cadence Credit Facility [Member] Deferred Rent And Other Long Term Liabilities Noncurrent Noncurrent Deposits And Other Assets. Net carrying amount after accumulated amortization as of the balance sheet date for the rights acquired through registration of a trademark to gain or protect exclusive use of a business name, symbol or other device or style for a specified period of time. Good Times Burgers And Frozen Custard Restaurants [Member]. Good Times Drive Thru Inc. [Member]. Incentive and Non Statutory Stock Options [Member] Incentive Stock Option [Member] Increase (Decrease) In Intangible Assets, Deposits And Other Carrying amount as of the balance sheet date of real estate and buildings held for productive use. This excludes land and buildings held for sale. The tabular disclosure for information for non-controlling interests. Non Statutory Stock Options [Member]. Number Of Restaurants Impaired Net carrying amount after accumulated amortization as of the balance sheet date of intangible assets not otherwise specified in the taxonomy having a reasonably expected period of economic benefit. Payments received from franchisees and others. Promissory Note [Member]. Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Remaining Contractual Term [Abstract] Weighted Average Number Basic And Diluted, Shares Outstanding [Abstract] Net contributions (distributions) paid to non-controlling interests. Change in accounts payable attributable to the purchase of property and equipment. Assets, Current Property, Plant and Equipment, Gross Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment Property, Plant and Equipment, Net Other Assets, Noncurrent Assets Liabilities, Current Liabilities, Noncurrent Stockholders' Equity Attributable to Parent Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest Liabilities and Equity Cost of Goods Sold Gain (Loss) on Disposition of Assets Nonoperating Income (Expense) Income (Loss) from Continuing Operations, Net of Tax, Attributable to Noncontrolling Interest Net Income (Loss) Available to Common Stockholders, Basic Depreciation, Depletion and Amortization, Nonproduction AmortizationOfLeaseIncentiveObligation Gain (Loss) on Disposition of Property Plant Equipment Gain (Loss) on Disposition of Other Assets Increase (Decrease) in Accounts Receivable and Other Operating Assets Increase (Decrease) in Inventories IncreaseDecreaseInIntangibleAssetsDepositsAndOther Increase (Decrease) in Accounts Payable Net Cash Provided by (Used in) Operating Activities Payments to Acquire Property, Plant, and Equipment Payments to Acquire Interest in Subsidiaries and Affiliates Net Cash Provided by (Used in) Investing Activities Repayments of Long-term Debt Net Cash Provided by (Used in) Financing Activities Cash and Cash Equivalents, Period Increase (Decrease) Finite-Lived Intangible Assets, Accumulated Amortization Finite-Lived Intangible Assets, Net Intangible Assets, Net (Excluding Goodwill) Finite-Lived Intangible Assets, Amortization Expense, Year Four Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders Number of Restaurants EX-101.PRE 10 gtim-20171226_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE GRAPHIC 11 bhoback_sig.jpg begin 644 bhoback_sig.jpg M_]C_X 02D9)1@ ! 0$ 8 !@ #_X0!F17AI9@ 34T *@ @ ! $: 4 M ! /@$; 4 ! 1@$H , ! 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Document and Entity Information - shares
3 Months Ended
Dec. 26, 2017
Feb. 09, 2018
Document And Entity Information    
Entity Registrant Name Good Times Restaurants Inc.  
Entity Central Index Key 0000825324  
Document Type 10-Q  
Document Period End Date Dec. 26, 2017  
Amendment Flag false  
Current Fiscal Year End Date --09-27  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   12,468,326
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2018  
XML 15 R2.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Dec. 26, 2017
Sep. 26, 2017
CURRENT ASSETS:    
Cash and cash equivalents $ 3,299 $ 4,337
Receivables, net of allowance for doubtful accounts of $0 643 573
Prepaid expenses and other 216 296
Inventories 882 847
Notes receivable 13 13
Total current assets 5,053 6,066
PROPERTY AND EQUIPMENT:    
Land and building 5,002 5,001
Leasehold improvements 22,053 21,159
Fixtures and equipment 21,535 20,945
Total property and equipment 48,590 47,105
Less accumulated depreciation and amortization (19,520) (18,636)
Total net property and equipment 29,070 28,469
Assets held for sale 0 1,221
OTHER ASSETS:    
Notes receivable, net of current portion 43 46
Deposits and other assets 224 240
Trademarks 3,900 3,900
Other intangibles, net 53 61
Goodwill 15,150 15,150
Total other assets 19,370 19,397
TOTAL ASSETS: 53,493 55,153
CURRENT LIABILITIES:    
Current maturities of long-term debt and capital lease obligations 17 17
Accounts payable 2,733 3,311
Deferred income 46 41
Other accrued liabilities 2,995 3,547
Total current liabilities 5,791 6,916
LONG-TERM LIABILITIES:    
Maturities of long-term debt and capital lease obligations due after one year 4,835 5,339
Deferred and other liabilities 6,131 5,614
Total long-term liabilities 10,966 10,953
Good Times Restaurants Inc. stockholders' equity:    
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding as of 12/26/17 and 09/26/17 0 0
Common stock, $.001 par value; 50,000,000 shares authorized, 12,468,325 and 12,427,280 shares issued and outstanding as of 12/26/17 and 09/26/17, respectively 12 12
Capital contributed in excess of par value 59,057 58,939
Accumulated deficit (24,963) (24,380)
Total Good Times Restaurants Inc. stockholders' equity 34,106 34,571
Non-controlling interests 2,630 2,713
Total stockholders' equity 36,736 37,284
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 53,493 $ 55,153
XML 16 R3.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Dec. 26, 2017
Sep. 26, 2017
Statement of Financial Position [Abstract]    
Receivables, allowance for doubtful accounts $ 0 $ 0
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 5,000,000 5,000,000
Preferred stock, issued 0 0
Preferred stock, outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 50,000,000 50,000,000
Common stock, shares issued 12,468,325 12,427,280
Common stock, shares outstanding 12,468,325 12,427,280
XML 17 R4.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Dec. 26, 2017
Dec. 27, 2016
NET REVENUES:    
Restaurant sales $ 22,597 $ 16,386
Franchise royalties 163 169
Total net revenues 22,760 16,555
RESTAURANT OPERATING COSTS:    
Food and packaging costs 7,203 5,155
Payroll and other employee benefit costs 8,279 5,995
Restaurant occupancy costs 1,640 1,294
Other restaurant operating costs 2,116 1,528
Preopening costs 577 351
Depreciation and amortization 846 630
Total restaurant operating costs 20,661 14,953
General and administrative costs 1,917 1,645
Advertising costs 507 412
Franchise costs 10 24
Gain on restaurant asset sales (8) (6)
LOSS FROM OPERATIONS (327) (473)
OTHER INCOME (EXPENSES):    
Interest income (expense), net (83) (20)
Total other income (expenses), net (83) (20)
NET LOSS (410) (493)
Income attributable to non-controlling interests (173) (140)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (583) $ (633)
BASIC AND DILUTED LOSS PER SHARE:    
Net loss attributable to common shareholders $ (0.05) $ (0.05)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING    
Basic and Diluted 12,444,748 12,288,365
XML 18 R5.htm IDEA: XBRL DOCUMENT v3.8.0.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Dec. 26, 2017
Dec. 27, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (410) $ (493)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization 908 673
Accretion of deferred rent 113 120
Amortization of lease incentive obligation (95) (62)
Stock-based compensation expense 118 199
Recognition of deferred gain on sale of restaurant building (8) (6)
Change in:    
Receivables and prepaids (70) (140)
Inventories (35) (16)
Deposits and other assets 80 (47)
Change in:    
Accounts payable (122) (354)
Deferred liabilities 353 278
Accrued and other liabilities (563) (504)
Net cash provided by (used in) operating activities 269 (352)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Payments for the purchase of property and equipment (1,947) (2,425)
Proceeds from sale leaseback transaction 1,397 0
Payments received from franchisees and others 3 3
Net cash used in investing activities (547) (2,422)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Borrowings on notes payable and long-term debt 900 0
Principal payments on notes payable and long-term debt (1,404) (7)
Net contributions (distributions) paid to non-controlling interests (256) (32)
Net cash used in financing activities (760) (39)
NET CHANGE IN CASH AND CASH EQUIVALENTS (1,038) (2,813)
CASH AND CASH EQUIVALENTS, beginning of period 4,337 6,330
CASH AND CASH EQUIVALENTS, end of period 3,299 3,517
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Cash paid for interest 68 1
Change in accounts payable attributable to the purchase of property and equipment $ (456) $ 1,844
XML 19 R6.htm IDEA: XBRL DOCUMENT v3.8.0.1
Basis of Presentation
3 Months Ended
Dec. 26, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Note 1.
Basis of Presentation
  
The accompanying unaudited condensed consolidated financial statements include the accounts of Good Times Restaurants Inc. and its wholly-owned subsidiaries, Good Times Drive Thru, Inc. (“Drive Thru”), BD of Colorado, LLC (“BD of Colo”), Bad Daddy’s Franchise Development, LLC (“BDFD”) and Bad Daddy’s International, LLC (“BDI”) (together referred to as the “Company”, “we” or “us”).  All significant intercompany balances and transactions have been eliminated in consolidation.
  
Drive Thru is engaged in the business of developing, owning, operating and franchising hamburger-oriented drive-through restaurants under the name Good Times Burgers & Frozen Custard.  Most of our Good Times restaurants are located in the front-range communities of Colorado, but we also have franchised restaurants in Wyoming.  BD of Colo, BDI and BDFD are engaged in the business of licensing, owning and operating full-service hamburger-oriented restaurants under the name Bad Daddy’s Burger Bar.
  
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 December 26, 2017 and the results of its operations and its cash flows for the fiscal quarters ended December 26, 2017 and December 27, 2016. Operating results for the fiscal quarter ended December 26, 2017 are not necessarily indicative of the results that may be expected for the year ending September 25, 2018. The condensed consolidated balance sheet as of September 26, 2017 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 26, 2017.
  
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 comprise 13 weeks.  The additional week in a 53-week fiscal year is added to the first quarter, making such quarter consist of 14 weeks.
 
Advertising Costs – We utilize Advertising Funds to administer certain advertising programs for both the Good Times and Bad Daddy’s brands that benefit both us and our franchisees.   We and our franchisees are required to contribute a percentage of gross sales to the fund.  As the contributions to these funds are designated and segregated for advertising, we act as an agent for the franchisees with regard to these contributions.  We consolidate the Advertising Funds into our financial statements on a net basis, whereby contributions from franchisees, when received, are recorded as offsets to reported advertising expenses.  Contributions to the Advertising Funds from our franchisees were $87,000 in each of the first fiscal quarters of 2018 and 2017.
XML 20 R7.htm IDEA: XBRL DOCUMENT v3.8.0.1
Goodwill and Intangible Assets
3 Months Ended
Dec. 26, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Note 2.
Goodwill and Intangible Assets
   
The following table presents goodwill and intangible assets as of December 26, 2017 and September 26, 2017 (in thousands):
 
   
December 26, 2017
   
September 26, 2017
 
   
Gross
Carrying
Amount
   
Accumulated
Amortization
   
Net
Carrying
Amount
   
Gross
Carrying
Amount
   
Accumulated
Amortization
   
Net
Carrying
Amount
 
Intangible assets subject to
amortization
                                   
Franchise rights
   
116
     
(64
)
   
52
     
116
     
(57
)
   
59
 
Non-compete agreements
   
15
     
(14
)
   
1
     
15
     
(13
)
   
2
 
   
$
131
   
$
(78
)
 
$
53
   
$
131
   
$
(70
)
 
$
61
 
Indefinite-lived intangible
assets:
                                               
Trademarks
 
$
3,900
   
$
0
   
$
3,900
   
$
3,900
   
$
0
   
$
3,900
 
Intangible assets, net
 
$
4,031
   
$
(78
)
 
$
3,953
   
$
4,031
   
$
(70
)
 
$
3,961
 
                                                 
Goodwill
 
$
15,150
   
$
0
   
$
15,150
   
$
15,150
   
$
0
   
$
15,150
 
 
The Company had no goodwill impairment losses in the periods presented in the above table or any prior periods.
 
There were no impairments to intangible assets during the quarter ended December 26, 2017.  The aggregate amortization expense related to these intangible assets subject to amortization was $7,000 for the quarter ended December 26, 2017. 
  
The estimated aggregate future amortization expense as of December 26, 2017 is as follows (in thousands):
 
Remainder of 2018
 
$
18
 
2019
   
23
 
2020
   
12
 
   
$
53
 
 
XML 21 R8.htm IDEA: XBRL DOCUMENT v3.8.0.1
Common Stock
3 Months Ended
Dec. 26, 2017
Stockholders' Equity Note [Abstract]  
Common Stock
Note 3.
Common Stock
  
On January 26, 2015, the Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission ("SEC") which was declared effective by the SEC on March 25, 2015. The registration statement allows the Company to issue common stock from time to time up to an aggregate amount of $75 million, of which $22,688,052 has been issued.
XML 22 R9.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-Based Compensation
3 Months Ended
Dec. 26, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Note 4.
Stock-Based Compensation
  
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 loss for the quarters ended December 26, 2017 and December 27, 2016 includes $118,000 and $199,000, respectively, of compensation costs related to our stock-based compensation arrangements.
     
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 that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options and stock awards granted during the first fiscal quarter ended December 26, 2017. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive equity awards.
 
During the quarter ended December 26, 2017, the Company granted a total of 12,963 incentive stock options, from available shares under its 2008 Plan, as amended, with an exercise price of $2.70 and a per-share weighted average fair value of $1.95.
 
During the quarter ended December 27, 2016, the Company granted a total of 149,899 incentive stock options, from available shares under its 2008 Plan, as amended, with exercise prices between of $3.05 and $3.15 and per-share weighted average fair values between $2.17 and $2.30.
 
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:
 
   
Quarter Ended 12/26/17
Incentive and
Non-Statutory Stock Options
   
Quarter Ended 12/27/16
Incentive and
Non-Statutory Stock Options
 
Expected term (years)
 
7.5
   
6.5 to 7.5
 
Expected volatility
 
75.67%
 
75.66% to 80.70%
 
Risk-free interest rate
 
2.17%
 
 
1.49% to 2.40%
 
Expected dividends
 
0
   
0
 
 
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 the United States treasury yields in effect at the time of grant corresponding with the expected term of the options. The expected option term is the number of years we estimate that options will be outstanding prior to exercise considering vesting schedules and our historical exercise patterns.
 
The following table summarizes stock option activity for the quarter ended December 26, 2017 under all plans:
  
   
Shares
   
Weighted
Average
Exercise Price
   
Weighted Avg.
Remaining
Contractual Life (Yrs.)
 
Outstanding-at beginning of year
   
681,922
   
$
4.25
       
Options granted
   
12,963
   
$
2.70
       
Options exercised
   
0
               
Forfeited
   
(2,970
)
 
$
4.04
       
Expired
   
(2,933
)
 
$
17.25
       
Outstanding December 26, 2017
   
688,982
   
$
4.17
   
6.5
 
Exercisable December 26, 2017
   
467,207
   
$
3.94
   
5.7
 
 
As of December 26, 2017, the aggregate intrinsic value of the outstanding and exercisable options was $58,000 and $58,000, respectively. Only options whose exercise price is below the current market price of the underlying stock are included in the intrinsic value calculation.
 
As of December 26, 2017, the total remaining unrecognized compensation cost related to non-vested stock options was $485,000 and is expected to be recognized over a weighted average period of approximately 1.8 years.
 
There were no stock options exercised during the quarters ended December 26, 2017 and December 27, 2016.
 
Restricted Stock Grants
 
During the quarter ended December 26, 2017, the Company granted a total of 37,037 shares of restricted stock from available shares under its 2008 Plan, as amended. The shares were issued with a grant date fair market value of $2.70 which is equal to the closing price of the stock on the date of the grant. The restricted stock grant vests over three years following the grant date.
 
During the quarter ended December 27, 2016, the Company granted a total of 101,094 shares of restricted stock from available shares under its 2008 Plan, as amended. The shares were issued with a grant date fair market value of $3.15 which is equal to the closing price of the stock on the date of the grant. The restricted stock grant vests over three years following the grant date.
 
A summary of the status of non-vested restricted stock as of December 26, 2017 is presented below.
 
   
Shares
   
Grant Date Fair
Value Per Share
 
Non-vested shares at beg of year
   
115,039
   
$
3.15 to $8.60
 
Granted
   
37,037
   
$
2.70
 
Vested
   
(41,038
)
 
$
3.15 to $4.18
 
Non-vested shares at December 26, 2017
   
111,038
   
$
2.70 to $8.60
 
 
As of December 26, 2017, there was $314,000 of total unrecognized compensation cost related to non-vested restricted stock. This cost is expected to be recognized over a weighted average period of approximately 1.4 years.
 
XML 23 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
Notes Payable and Long-Term Debt
3 Months Ended
Dec. 26, 2017
Debt Disclosure [Abstract]  
Notes Payable and Long-Term Debt
Note 5.
Notes Payable and Long-Term Debt
    
Cadence Credit Facility
 
On September 8, 2016, the Company entered into a credit agreement with Cadence Bank (“Cadence”) pursuant to which Cadence agreed to loan the Company up to $9,000,000 (the “Cadence Credit Facility”).  On September 11, 2017, the Cadence Credit Facility was amended to increase the loan maximum to $12,000,000 and extend the maturity date to December 31, 2020. The Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%.  All borrowings under the Cadence Credit Facility bear interest at a variable rate based upon the Company’s election of (i) 3.0% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.125% floor, plus 4.0%.  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. As of December 26, 2017, the weighted average interest rate applicable to borrowings under the Cadence Credit Facility was 5.6456%.
     
The Cadence Credit Facility contains certain affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants setting a maximum leverage ratio of 5.35:1, a minimum fixed charge coverage ratio of 1.25:1 and minimum liquidity of $2,500,000. As of December 26, 2017, the Company was in compliance with its covenants.
    
As a result of entering into the Cadence Credit Facility and the amendment, the Company paid loan origination costs including professional fees of approximately $197,000 and will amortize these costs over the term of the credit agreement.
   
The obligations under the Cadence Credit Facility are collateralized by a first priority lien on substantially all of the Company’s assets. 
 
As of December 26, 2017, the outstanding balance on the facility was $4,800,000.
XML 24 R11.htm IDEA: XBRL DOCUMENT v3.8.0.1
Net Income (Loss) per Common Share
3 Months Ended
Dec. 26, 2017
Earnings Per Share [Abstract]  
Net Income (Loss) per Common Share
Note 6.
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 grants 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. Options and restricted stock grants for 800,020 and 984,718 shares of common stock were not included in computing diluted EPS for the quarters ended December 26, 2017 and December 27, 2016, respectively, because their effects were anti-dilutive.
XML 25 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
Contingent Liabilities and Liquidity
3 Months Ended
Dec. 26, 2017
Commitments and Contingencies Disclosure [Abstract]  
Contingent Liabilities and Liquidity
Note 7.
Contingent Liabilities and Liquidity
  
We remain contingently liable on various leases underlying restaurants that were previously sold to franchisees.  We have never experienced any losses related to these contingent lease liabilities, however if a franchisee defaults on the payments under the leases, we would be liable for the lease payments as the assignor or sub-lessor of the lease.  Currently we have not been notified nor are we aware of any leases in default by the franchisees, however there can be no assurance that there will not be in the future which could have a material effect on our future operating results.
XML 26 R13.htm IDEA: XBRL DOCUMENT v3.8.0.1
Impairment of Long-Lived Assets and Goodwill
3 Months Ended
Dec. 26, 2017
Goodwill and Intangible Asset Impairment [Abstract]  
Impairment of Long-Lived Assets and Goodwill
Note 8.
Impairment of Long-Lived Assets and Goodwill
 
Long-Lived Assets. We review our long-lived assets for impairment, including land, property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the capitalized costs of the assets to the future undiscounted net cash flows expected to be generated by the assets and the expected cash flows are based on recent historical cash flows at the restaurant level (the lowest level that cash flows can be determined).
 
Given the results of our impairment analysis at December 26, 2017, there are no restaurants which are impaired.
 
Trademarks. Trademarks have been determined to have an indefinite life.  We evaluate our trademarks for impairment annually and on an interim basis as events and circumstances warrant by comparing the fair value of the trademarks with their carrying amount. There was no impairment required to the acquired trademarks as of December 26, 2017 and December 27, 2016.
 
Goodwill. 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.  As of December 26, 2017, the Company had $96,000 of goodwill associated with the Good Times reporting unit and $15,054,000 of goodwill associated with its Bad Daddy’s reporting unit.  No goodwill impairment charges were recognized as of December 26, 2017 and December 27, 2016.
XML 27 R14.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes
3 Months Ended
Dec. 26, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Note 9.
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 the 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. The deferred tax assets are reviewed periodically for recoverability and valuation allowances are adjusted as necessary.
 
The Company has significant net operating loss carry-forwards from prior years and incurred additional net operating losses during the quarters ended December 26, 2017 and December 27, 2016.  These losses resulted in an increase in the related deferred tax assets; however, valuation allowances were provided which reduced these deferred tax assets to zero; therefore, no income tax provision or benefit was recognized for the quarters ended December 26, 2017 and December 27, 2016 resulting in an effective income tax rate of 0% for both periods.
 
The Company is subject to taxation in various jurisdictions. The Company continues to remain subject to examination by U.S. federal authorities for the years 2014 through 2017. The Company believes that its income tax filing positions and deductions will be sustained on 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 December 26, 2017.
XML 28 R15.htm IDEA: XBRL DOCUMENT v3.8.0.1
Non-controlling Interests
3 Months Ended
Dec. 26, 2017
Noncontrolling Interest [Abstract]  
Non-controlling Interests
Note 10.
Non-controlling Interests
 
Non-controlling interests are presented as a separate item in the stockholders’ 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 that do not result 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 members are shown on the accompanying consolidated balance sheet in the stockholders’ equity section as a non-controlling interest and is adjusted each period to reflect the limited partners’ and members’ share of the net income or loss as well as any cash contributions or distributions to or from the limited partners and members for the period. The limited partners’ and members’ share of the net income or loss in the subsidiary is shown as non-controlling interest income or expense 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 quarter ended December 26, 2017 (in thousands):
 
   
Good Times
   
Bad Daddy’s
   
Total
 
Balance at September 26, 2017
 
$
434
   
$
2,279
   
$
2,713
 
Income
   
79
     
94
     
173
 
Distributions
   
(94
)
   
(162
)
   
(256
)
Balance at December 26, 2017
 
$
419
   
$
2,211
   
$
2,630
 
 
Our non-controlling interests consist of one joint venture partnership involving seven Good Times restaurants and six joint venture partnerships involving six Bad Daddy’s restaurants. Three of the six Bad Daddy’s joint venture partnerships were established in fiscal 2016 and fiscal 2017 to fund the construction of Bad Daddy’s restaurants in North Carolina. Two of the restaurants opened in fiscal 2017 and one opened in October 2017.
XML 29 R16.htm IDEA: XBRL DOCUMENT v3.8.0.1
Recent Accounting Pronouncements
3 Months Ended
Dec. 26, 2017
Accounting Changes and Error Corrections [Abstract]  
Recent Accounting Pronouncements
Note 11.
Recent Accounting Pronouncements
 
In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” (ASU 2016-09).   ASU 2016-09 includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The areas for simplification include income tax consequences, forfeitures, classification of awards as either equity or liabilities and classification on the statement of cash flows. In May 2017, the FASB issued ASU No. 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.”  This pronouncement provides clarity in guidance in the instance of a change in the terms or conditions of a share-based payment award.  Both pronouncements are effective for annual periods and interim periods within those annual periods beginning after December 15, 2016 and early adoption is permitted for financial statements that have not been previously issued. The Company adopted both ASUs effective with its 2018 fiscal year; such adoption did not have material impact on our financial position or results from operations.
 
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).”  This update was issued to replace the current revenue recognition guidance, creating a more comprehensive five-step model.  In March 2016, the FASB issued No. ASU 2016-04, “Liabilities – Extinguishments of Liabilities: Recognition of Breakage for Certain Prepaid Stored-Value Products.”  This pronouncement provides guidance for the derecognition of prepaid stored-value product liabilities, consistent with the breakage guidance in Topic 606.  These amendments are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years.  We do not expect that the adoption of these new standards will have a material impact to our revenue recognition related to company-owned restaurant sales, recognition of royalty fees from our franchise agreement, or impact from recognition of gift card breakage.
 
In February 2016, the Financial Accounting Standards Board (“FASB”) FASB issued Accounting Standards Update No. ASU No. 2016-02, “Leases (Topic 842)”, (ASU 2016-02), which replaces the existing guidance in Accounting Standard Codification 840, Leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. ASU 2016-02 This pronouncement requires a dual approach for lessee accounting under which a lessee would account for leases as finance leases or operating leases. Both finance leases and operating leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability. The Company is currently assessing the impact that adoption of ASU 2016-02 will have on its consolidated financial position or results of operations, but expect that it will result in a significant increase in our long-term assets and liabilities given we have a significant number of leases.
 
In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment,” which eliminates Step 2 from the impairment test applied to goodwill.  Under the new standard, goodwill impairment tests will compare the fair value of a reporting unit with its carrying amount.  An impairment charge will be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill.  This pronouncement is effective for annual and interim periods beginning after December 15, 2019 and should be applied on a prospective basis.  We do not expect that the adoption of this standard will have a material impact on our financial position or results from operations.
XML 30 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
Subsequent Events
3 Months Ended
Dec. 26, 2017
Subsequent Events [Abstract]  
Subsequent Events
Note 12.
Subsequent Events
 
On January 30, 2018 the Company closed one Good Times restaurant in Aurora, Colorado. A non-cash impairment charge of $219,000 related to this restaurant was previously taken in the fiscal year ended September 26, 2017 and no additional loss from disposal of assets is expected. The Company is currently analyzing subleasing opportunities to offset the remaining lease costs over the approximate 17 remaining years of the lease.
XML 31 R18.htm IDEA: XBRL DOCUMENT v3.8.0.1
Segment Reporting
3 Months Ended
Dec. 26, 2017
Segment Reporting [Abstract]  
Segment Reporting
Note 13.
Segment Reporting
 
All of our Good Times Burgers and Frozen Custard restaurants (Good Times) compete in the quick-service drive-through dining industry while our Bad Daddy’s Burger Bar restaurants (Bad Daddy’s) compete in the full-service upscale casual 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 (loss) 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
 
   
Dec 26, 2017
   
Dec 27, 2016
 
Revenues
           
Good Times
 
$
7,688
   
$
6,952
 
Bad Daddy’s
   
15,072
     
9,603
 
   
$
22,760
   
$
16,555
 
Loss from operations
               
Good Times
 
$
(19
)
 
$
(111
)
Bad Daddy’s
   
(190
)
   
(190
)
Corporate
   
(118
)
   
(172
)
   
$
(327
)
 
$
(473
)
Capital expenditures
               
Good Times
 
$
20
   
$
953
 
Bad Daddy’s
   
1,926
     
1,441
 
Corporate
   
1
     
31
 
   
$
1,947
   
$
2,425
 

   
Dec 26, 2017
   
Sep 26, 2017
 
Property and equipment, net
           
Good Times
 
$
5,635
   
$
7,061
 
Bad Daddy’s
   
22,961
     
22,133
 
Corporate
   
474
     
496
 
   
$
29,070
   
$
29,690
 
 
XML 32 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
Goodwill and Intangible Assets (Tables)
3 Months Ended
Dec. 26, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill and Intangible Assets
The following table presents goodwill and intangible assets as of December 26, 2017 and September 26, 2017 (in thousands):
 
   
December 26, 2017
   
September 26, 2017
 
   
Gross
Carrying
Amount
   
Accumulated
Amortization
   
Net
Carrying
Amount
   
Gross
Carrying
Amount
   
Accumulated
Amortization
   
Net
Carrying
Amount
 
Intangible assets subject to
amortization
                                   
Franchise rights
   
116
     
(64
)
   
52
     
116
     
(57
)
   
59
 
Non-compete agreements
   
15
     
(14
)
   
1
     
15
     
(13
)
   
2
 
   
$
131
   
$
(78
)
 
$
53
   
$
131
   
$
(70
)
 
$
61
 
Indefinite-lived intangible
assets:
                                               
Trademarks
 
$
3,900
   
$
0
   
$
3,900
   
$
3,900
   
$
0
   
$
3,900
 
Intangible assets, net
 
$
4,031
   
$
(78
)
 
$
3,953
   
$
4,031
   
$
(70
)
 
$
3,961
 
                                                 
Goodwill
 
$
15,150
   
$
0
   
$
15,150
   
$
15,150
   
$
0
   
$
15,150
 
 
Schedule of Estimated Aggregate Future Amortization Expense For Finite-Lived Intangible Assets
The estimated aggregate future amortization expense as of December 26, 2017 is as follows (in thousands):
 
Remainder of 2018
 
$
18
 
2019
   
23
 
2020
   
12
 
   
$
53
 
 
XML 33 R20.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-Based Compensation (Tables)
3 Months Ended
Dec. 26, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Weighted Average Assumptions Used to Estimate Fair Value of Stock Option Grants
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:
 
   
Quarter Ended 12/26/17
Incentive and
Non-Statutory Stock Options
   
Quarter Ended 12/27/16
Incentive and
Non-Statutory Stock Options
 
Expected term (years)
 
7.5
   
6.5 to 7.5
 
Expected volatility
 
75.67%
 
75.66% to 80.70%
 
Risk-free interest rate
 
2.17%
 
 
1.49% to 2.40%
 
Expected dividends
 
0
   
0
 
 
Summary of Stock Option Activity under Share Based Compensation Plan
The following table summarizes stock option activity for the quarter ended December 26, 2017 under all plans:
  
   
Shares
   
Weighted
Average
Exercise Price
   
Weighted Avg.
Remaining
Contractual Life (Yrs.)
 
Outstanding-at beginning of year
   
681,922
   
$
4.25
       
Options granted
   
12,963
   
$
2.70
       
Options exercised
   
0
               
Forfeited
   
(2,970
)
 
$
4.04
       
Expired
   
(2,933
)
 
$
17.25
       
Outstanding December 26, 2017
   
688,982
   
$
4.17
   
6.5
 
Exercisable December 26, 2017
   
467,207
   
$
3.94
   
5.7
 
 
Schedule of Non-vested Restricted Stock Activity
A summary of the status of non-vested restricted stock as of December 26, 2017 is presented below.
 
   
Shares
   
Grant Date Fair
Value Per Share
 
Non-vested shares at beg of year
   
115,039
   
$
3.15 to $8.60
 
Granted
   
37,037
   
$
2.70
 
Vested
   
(41,038
)
 
$
3.15 to $4.18
 
Non-vested shares at December 26, 2017
   
111,038
   
$
2.70 to $8.60
 
 
XML 34 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
Non-controlling Interests (Tables)
3 Months Ended
Dec. 26, 2017
Noncontrolling Interest [Abstract]  
Schedule of Noncontrolling Interest
The following table summarizes the activity in non-controlling interests during the quarter ended December 26, 2017 (in thousands):
 
   
Good Times
   
Bad Daddy’s
   
Total
 
Balance at September 26, 2017
 
$
434
   
$
2,279
   
$
2,713
 
Income
   
79
     
94
     
173
 
Distributions
   
(94
)
   
(162
)
   
(256
)
Balance at December 26, 2017
 
$
419
   
$
2,211
   
$
2,630
 
 
XML 35 R22.htm IDEA: XBRL DOCUMENT v3.8.0.1
Segment Reporting (Tables)
3 Months Ended
Dec. 26, 2017
Segment Reporting [Abstract]  
Schedule of Reportable Segments
The following tables present information about our reportable segments for the respective periods (in thousands):
 
   
Quarter Ended
 
   
Dec 26, 2017
   
Dec 27, 2016
 
Revenues
           
Good Times
 
$
7,688
   
$
6,952
 
Bad Daddy’s
   
15,072
     
9,603
 
   
$
22,760
   
$
16,555
 
Loss from operations
               
Good Times
 
$
(19
)
 
$
(111
)
Bad Daddy’s
   
(190
)
   
(190
)
Corporate
   
(118
)
   
(172
)
   
$
(327
)
 
$
(473
)
Capital expenditures
               
Good Times
 
$
20
   
$
953
 
Bad Daddy’s
   
1,926
     
1,441
 
Corporate
   
1
     
31
 
   
$
1,947
   
$
2,425
 

   
Dec 26, 2017
   
Sep 26, 2017
 
Property and equipment, net
           
Good Times
 
$
5,635
   
$
7,061
 
Bad Daddy’s
   
22,961
     
22,133
 
Corporate
   
474
     
496
 
   
$
29,070
   
$
29,690
 
 
XML 36 R23.htm IDEA: XBRL DOCUMENT v3.8.0.1
Basis of Presentation (Details) - USD ($)
3 Months Ended
Dec. 26, 2017
Dec. 27, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Advertising Costs $ 87,000 $ 87,000
XML 37 R24.htm IDEA: XBRL DOCUMENT v3.8.0.1
Goodwill and Intangible Assets (Narrative) (Details)
$ in Thousands
3 Months Ended
Dec. 26, 2017
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Amortization of Intangible Assets $ 7
XML 38 R25.htm IDEA: XBRL DOCUMENT v3.8.0.1
Goodwill and Intangible Assets (Intangible Assets Subject to Amortization) (Details) - USD ($)
$ in Thousands
Dec. 26, 2017
Sep. 26, 2017
Gross Carrying Amount $ 131 $ 131
Accumulated Amortization (78) (70)
Net Carrying Amount 53 61
Franchise rights [Member]    
Gross Carrying Amount 116 116
Accumulated Amortization (64) (57)
Net Carrying Amount 52 59
Non-compete agreements [Member]    
Gross Carrying Amount 15 15
Accumulated Amortization (14) (13)
Net Carrying Amount $ 1 $ 2
XML 39 R26.htm IDEA: XBRL DOCUMENT v3.8.0.1
Goodwill and Intangible Assets (Indefinite-lived Intangible Assets) (Details) - USD ($)
$ in Thousands
Dec. 26, 2017
Sep. 26, 2017
Trademarks and Trade Names [Member]    
Indefinite-Lived Intangible Assets (Excluding Goodwill) $ 3,900 $ 3,900
XML 40 R27.htm IDEA: XBRL DOCUMENT v3.8.0.1
Goodwill and Intangible Assets (Schedule of Goodwill and Intangible Assets) (Details) - USD ($)
$ in Thousands
Dec. 26, 2017
Sep. 26, 2017
Goodwill and Intangible Assets Disclosure [Abstract]    
Intangible assets, gross carrying amount $ 4,031 $ 4,031
Accumulated Amortization (78) (70)
Intangible Assets, net carrying amount 3,953 3,961
Goodwill, gross carrying amount 15,150 15,150
Goodwill, Accumulated Amortization 0 0
Goodwill, net carrying amount $ 15,150 $ 15,150
XML 41 R28.htm IDEA: XBRL DOCUMENT v3.8.0.1
Goodwill and Intangible Assets (Estimated Aggregate Future Amortization Expense) (Details) - USD ($)
$ in Thousands
Dec. 26, 2017
Sep. 26, 2017
Goodwill and Intangible Assets Disclosure [Abstract]    
Remainder of 2018 $ 18  
2019 23  
2020 12  
Net Carrying Amount $ 53 $ 61
XML 42 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
Common Stock (Details) - USD ($)
May 07, 2015
Dec. 27, 2015
Stockholders' Equity Note [Abstract]    
Aggregate amount of stock value authorized by SEC to be issued $ 75,000,000  
Aggregate amount of stock value issued under S-3   $ 22,688,052
XML 43 R30.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-Based Compensation (Narrative) (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Dec. 26, 2017
Dec. 27, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock based compensation expense $ 118 $ 199
Stock options granted, shares 12,963  
Stock options granted, exercise price $ 2.70  
Incentive Stock Option [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock options granted, shares 12,963 149,899
Stock options granted, exercise price $ 2.70  
Stock options granted, per-share weighted average fair value $ 1.95  
Incentive Stock Option [Member] | Minimum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock options granted, exercise price   $ 3.05
Stock options granted, per-share weighted average fair value   2.17
Incentive Stock Option [Member] | Maximum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Stock options granted, exercise price   3.15
Stock options granted, per-share weighted average fair value   $ 2.30
Stock Options [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Aggregate Intrinsic Value, Outstanding $ 58  
Aggregate Intrinsic Value, Exercisable 58  
Remaining total unrecognized compensation cost related to unvested stock-based arrangements $ 485  
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition 1 year 9 months 18 days  
Restricted Stock [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Restricted stock granted, shares 37,037 101,094
Restricted stock granted, weighted average grant date fair value per share $ 2.70 $ 3.15
Vesting period 3 years 3 years
Remaining total unrecognized compensation cost related to unvested stock-based arrangements $ 314  
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition 1 year 4 months 24 days  
XML 44 R31.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-Based Compensation (Weighted Average Assumptions Used to Estimate Fair Value of Stock Option Grants) (Details) - Incentive and Non-Statutory Stock Options [Member] - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Dec. 26, 2017
Sep. 26, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Expected term (years) 7 years 6 months  
Expected volatility 75.67%  
Expected volatility, minimum   75.66%
Expected volatility, maximum   80.70%
Risk-free interest rate 2.17%  
Risk-free interest rate, minimum   1.49%
Risk-free interest rate, maximum   2.40%
Expected dividends $ 0 $ 0
Minimum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Expected term (years)   6 years 6 months
Maximum [Member]    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Expected term (years)   7 years 6 months
XML 45 R32.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-Based Compensation (Summary of Stock Option Activity under Share Based Compensation Plan) (Details)
3 Months Ended
Dec. 26, 2017
$ / shares
shares
Shares  
Outstanding-at beginning of year 688,982
Options granted 12,963
Options exercised 0
Forfeited (2,970)
Expired (2,933)
Outstanding December 26, 2017 688,982
Exercisable December 26, 2017 467,207
Weighted Average Exercise Price  
Outstanding-at beginning of year | $ / shares $ 4.25
Options granted | $ / shares 2.70
Forfeited | $ / shares 4.04
Expired | $ / shares 17.25
Outstanding December 26, 2017 | $ / shares 4.17
Exercisable December 26, 2017 | $ / shares $ 3.94
Weighted Avg. Remaining Contractual Life (Yrs.)  
Outstanding December 26, 2017 6 years 6 months
Exercisable December 26, 2017 5 years 8 months 12 days
XML 46 R33.htm IDEA: XBRL DOCUMENT v3.8.0.1
Stock-Based Compensation (Summary of Non-vested Restricted Stock Activity) (Details) - Restricted Stock [Member] - $ / shares
3 Months Ended
Dec. 26, 2017
Dec. 27, 2016
Shares    
Non-vested shares at beg of year 115,039  
Granted 37,037 101,094
Vested (41,038)  
Non-vested shares at December 26, 2017 111,038  
Grant Date Fair Value Per Share    
Granted $ 2.70 $ 3.15
Minimum [Member]    
Grant Date Fair Value Per Share    
Non-vested shares 3.15  
Vested 3.15  
Non-vested shares at December 26, 2017 2.70  
Maximum [Member]    
Grant Date Fair Value Per Share    
Non-vested shares 8.60  
Vested 4.18  
Non-vested shares at December 26, 2017 $ 8.60  
XML 47 R34.htm IDEA: XBRL DOCUMENT v3.8.0.1
Notes Payable and Long-Term Debt (Details) - Cadence Credit Facility [Member] - Good Times Drive Thru Inc. [Member] - USD ($)
$ in Thousands
Sep. 11, 2017
Sep. 08, 2016
Dec. 26, 2017
Debt Instrument [Line Items]      
Loan Agreement, amount $ 12,000 $ 9,000  
Interest rate   0.25% 5.6456%
Maturity date Dec. 31, 2020    
Interest rate description   All borrowings under the Cadence Credit Facility bear interest at a variable rate based upon the Company’s election of (i) 3.0% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.125% floor, plus 4.0%.  
Payment of debt issuance costs   $ 197  
Minimum liquidity of credit facility     $ 2,500
Outstanding balance on credit     $ 4,800
XML 48 R35.htm IDEA: XBRL DOCUMENT v3.8.0.1
Net Income (Loss) per Common Share (Details) - shares
3 Months Ended
Dec. 26, 2017
Dec. 27, 2016
Earnings Per Share [Abstract]    
Antidilutive securities excluded from diluted EPS computation 800,020 984,718
XML 49 R36.htm IDEA: XBRL DOCUMENT v3.8.0.1
Impairment of Long-Lived Assets and Goodwill (Details)
$ in Thousands
3 Months Ended
Dec. 26, 2017
USD ($)
restaurants
Sep. 26, 2017
USD ($)
Impaired Long-Lived Assets Held and Used [Line Items]    
Number of restaurants impaired | restaurants 0  
Goodwill $ 15,150 $ 15,150
Good Times Drive Thru Inc. [Member]    
Impaired Long-Lived Assets Held and Used [Line Items]    
Goodwill 96  
Bad Daddy's Franchise Development, LLC [Member]    
Impaired Long-Lived Assets Held and Used [Line Items]    
Goodwill $ 15,054  
XML 50 R37.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income Taxes (Details) - USD ($)
$ in Thousands
3 Months Ended
Dec. 26, 2017
Dec. 27, 2016
Income Tax Examination [Line Items]    
Deferred tax assets $ 0 $ 0
Income tax provision or benefit $ 0 $ 0
Effective income tax rate 0.00% 0.00%
Reserves for uncertain tax positions $ 0  
Accrual for interest and penalties $ 0  
Minimum [Member]    
Income Tax Examination [Line Items]    
Years subject to income tax examination 2014  
Maximum [Member]    
Income Tax Examination [Line Items]    
Years subject to income tax examination 2017  
XML 51 R38.htm IDEA: XBRL DOCUMENT v3.8.0.1
Non-controlling Interests (Details)
$ in Thousands
3 Months Ended
Dec. 26, 2017
USD ($)
restaurants
Noncontrolling Interest [Line Items]  
Balance at September 26, 2017 $ 2,713
Income 173
Distributions (256)
Balance at December 26, 2017 2,630
Good Times Drive Thru Inc. [Member]  
Noncontrolling Interest [Line Items]  
Balance at September 26, 2017 434
Income 79
Distributions (94)
Balance at December 26, 2017 $ 419
Number of restaurants | restaurants 7
Bad Daddy's International, LLC [Member]  
Noncontrolling Interest [Line Items]  
Balance at September 26, 2017 $ 2,279
Income 94
Distributions (162)
Balance at December 26, 2017 $ 2,211
Number of restaurants | restaurants 6
XML 52 R39.htm IDEA: XBRL DOCUMENT v3.8.0.1
Subsequent Events (Details) - Subsequent Event [Member]
$ in Thousands
Jan. 30, 2018
USD ($)
Non-cash impairment charge $ 219
Loss from disposal of assets $ 0
XML 53 R40.htm IDEA: XBRL DOCUMENT v3.8.0.1
Segment Reporting (Details) - USD ($)
$ in Thousands
3 Months Ended
Dec. 26, 2017
Dec. 27, 2016
Sep. 26, 2017
Segment Reporting Information [Line Items]      
Revenues $ 22,760 $ 16,555  
Loss from operations (327) (473)  
Capital expenditures 1,947 2,425  
Property and equipment, net 29,070   $ 29,690
Good Times Burgers And Frozen Custard Restaurants [Member]      
Segment Reporting Information [Line Items]      
Revenues 7,688 6,952  
Loss from operations (19) (111)  
Capital expenditures 20 953  
Property and equipment, net 5,635   7,061
Bad Daddys Burger Bar Restaurant [Member]      
Segment Reporting Information [Line Items]      
Revenues 15,072 9,603  
Loss from operations (190) (190)  
Capital expenditures 1,926 1,441  
Property and equipment, net 22,961   22,133
Corporate Segment [Member]      
Segment Reporting Information [Line Items]      
Loss from operations (118) (172)  
Capital expenditures 1 $ 31  
Property and equipment, net $ 474   $ 496
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