INCOME TAXES

12 Months Ended

Sep. 27, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

On July 4, 2025, President Trump signed H.R. 1, the “One Big Beautiful Bill Act” (“OBBBA”) into law. The OBBBA makes permanent many of the tax provisions previously enacted as part of the 2017 Tax Cut and Jobs Act that were set to expire at the end of 2025. The OBBBA also includes (i) the restoration of immediate expensing for domestic research and development expenditures, (ii) the reinstatement of 100% bonus depreciation for qualified property and (iii) favorably modifying the Internal Revenue Code Section 163(j) interest limitation from tax adjusted EBIT to EBITDA. FASB Topic 740, Income Taxes, requires the tax effects of changes in tax laws or rates be recognized in the period in which the law is

enacted. The enactment of the OBBBA did not have a material impact on the Company’s effective tax rate, or deferred tax balances as of September 27, 2025.

On December 27, 2020, the Consolidated Appropriations Act of 2021 (“CAA”) was enacted and provided clarification on the tax deductibility of expenses funded with PPP Loans as fully deductible for tax purposes. During the year ended September 28, 2024, the Company recorded income of $285,000 for financial reporting purposes related to the forgiveness of its PPP Loans which is not taxable.

The provision (benefit) for income taxes consists of the following:

	Year Ended
	September 27, 2025		September 28, 2024
	(in thousands)
Current provision (benefit):
Federal	$	102	$	85
State and local	62		161
	164		246
Deferred provision (benefit):
Federal	581		(617)
State and local	4,579		(444)
	5,160		(1,061)
	$	5,324	$	(815)

The effective tax rate differs from the U.S. income tax rate as follows:

	Year Ended
	September 27, 2025		September 28, 2024
	(in thousands)
Provision at federal statutory rate (21%)	$	(806)	$	(958)
State and local income taxes, net of tax benefits	(100)		231
Gain on forgiveness of PPP Loans	—		(60)
Tax credits	(801)		(943)
Loss attributable to non-controlling interest	(484)		(32)
Changes in tax rates	167		5
Change in valuation allowance	7,322		963
Other	26		(21)
	$	5,324	$	(815)

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

	September 27, 2025		September 28, 2024
	(in thousands)
Deferred tax assets:
State net operating loss carryforwards	$	4,598	$	4,670
Lease liabilities	18,222		20,349
Deferred compensation	239		257
Tax credits	4,033		3,376
Partnership investments	260
Other	228		392
Deferred tax assets, before valuation allowance	27,580		29,044
Valuation allowance	(11,558)		(4,236)
Deferred tax assets, net of valuation allowance	16,022		24,808
Deferred tax liabilities:
Depreciation and amortization	(16,032)		(19,636)
Prepaid expenses	(350)		(373)
Deferred tax liabilities	(16,382)		(20,009)
Net deferred tax assets (liabilities)	$	(360)	$	4,799

In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. In the assessment of the valuation allowance, appropriate consideration was given to all positive and negative evidence including reversal of existing taxable temporary differences, forecasts of future earnings, and the duration of statutory carryforward periods. A significant piece of objective negative evidence evaluated is the cumulative loss incurred over the three-year period ended September 27, 2025. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. Based on the weight of available evidence, the Company determined that its deferred tax assets were not realizable on a more-likely-than-not basis and that a full valuation allowance is required. Accordingly, the Company increased the valuation allowance by $7,322,000 for the year ended September 27, 2025.

As of September 27, 2025, the Company had General Business Credit carryforwards of approximately $4,033,000 which expire through fiscal 2045. In addition, as of September 27, 2025, the Company has New York State net operating loss carryforwards of approximately $27,471,000 and New York City net operating loss carryforwards of approximately $25,268,000 that expire in varying amounts through fiscal 2041.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits excluding interest and penalties is as follows:

	September 27, 2025		September 28, 2024
	(in thousands)
Balance at beginning of year	$	210	$	185
Additions based on tax positions taken in current and prior years	(24)		25
Decreases based on tax positions taken in prior years	—		—
Balance at end of year	$	186	$	210

The entire amount of unrecognized tax benefits if recognized would reduce our annual effective tax rate. However, if recognized, the entire amount of unrecognized tax benefit would attract a valuation allowance, thereby offsetting the favorable impact to the annual effective tax rate. For the years ended September 27, 2025 and September 28, 2024, there are no amounts accrued for the payment of interest and penalties. The Company does not expect a significant change to its unrecognized tax benefits within the next 12 months.

The Company files tax returns in the U.S. and various state and local jurisdictions with varying statutes of limitations. The 2022 through 2025 fiscal years remain subject to examination by the Internal Revenue Service and most state and local tax authorities.