Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Feb. 29, 2024 | Apr. 12, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Feb. 29, 2024 | |
Document Transition Report | false | |
Entity File Number | 0-31555 | |
Entity Registrant Name | BAB, Inc | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-4389547 | |
Entity Address, Address Line One | 500 Lake Cook Road, Suite 475 | |
Entity Address, City or Town | Deerfield | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60015 | |
City Area Code | 847 | |
Local Phone Number | 948-7520 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | BABB | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 7,263,508 | |
Entity Central Index Key | 0001123596 | |
Current Fiscal Year End Date | --11-30 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Feb. 29, 2024 | Nov. 30, 2023 |
Current Assets | ||
Cash | $ 1,890,204 | $ 1,888,728 |
Restricted cash | 229,520 | 183,944 |
Receivables | ||
Trade accounts and notes receivable (net of allowance for doubtful accounts of $51,455 in 2024 and $28,873 in 2023) | 68,696 | 71,681 |
Marketing fund contributions receivable from franchisees and stores | 15,702 | 14,995 |
Lease receivable | 5,919 | 5,900 |
Prepaid expenses and other current assets | 93,039 | 96,544 |
Total Current Assets | 2,303,080 | 2,261,792 |
Property, plant and equipment (net of accumulated depreciation of $159,414 in both 2024 and 2023. | 0 | 0 |
Lease receivable | 30,918 | 32,406 |
Trademarks | 461,445 | 461,445 |
Goodwill | 1,493,771 | 1,493,771 |
Definite lived intangible assets (net of accumulated amortization of $139,521 in 2024 and $138,541 in 2023) | 15,365 | 16,345 |
Operating lease right of use | 409,669 | 32,745 |
Total Noncurrent Assets | 2,411,168 | 2,036,712 |
Total Assets | 4,714,248 | 4,298,504 |
Current Liabilities | ||
Accounts payable | 49,876 | 3,042 |
Income tax payable | 108,125 | 47,334 |
Accrued expenses and other current liabilities | 311,833 | 325,880 |
Current portion operating lease liability | 48,383 | 39,818 |
Total Current Liabilities | 774,159 | 647,992 |
Long-term Liabilities (net of current portion) | ||
Operating lease liability | 363,055 | 0 |
Deferred franchise revenue | 157,104 | 162,026 |
Deferred tax liability | 287,502 | 309,293 |
Total Long-term Liabilities | 807,661 | 471,319 |
Total Liabilities | 1,581,820 | 1,119,311 |
Stockholders' Equity | ||
Preferred shares -$.001 par value; 4,000,000 authorized; no shares outstanding as of February 29, 2024 and November 30, 2023 | 0 | 0 |
Common stock -$.001 par value; 15,000,000 shares authorized; 8,466,953 shares issued and 7,263,508 shares outstanding as of February 29, 2024 and November 30, 2023 | 13,508,257 | 13,508,257 |
Additional paid-in capital | 987,034 | 987,034 |
Treasury stock | (222,781) | (222,781) |
Accumulated deficit | (11,140,082) | (11,093,317) |
Total Stockholders' Equity | 3,132,428 | 3,179,193 |
Total Liabilities and Stockholders' Equity | 4,714,248 | 4,298,504 |
Series A Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred shares -$.001 par value; 4,000,000 authorized; no shares outstanding as of February 29, 2024 and November 30, 2023 | 0 | 0 |
Marketing Fund [Member] | ||
Current Liabilities | ||
Contract Liabilities - Current | 231,547 | 201,824 |
Franchise [Member] | ||
Current Liabilities | ||
Contract Liabilities - Current | 24,395 | 30,094 |
Long-term Liabilities (net of current portion) | ||
Deferred franchise revenue | $ 157,104 | $ 162,026 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Feb. 29, 2024 | Nov. 30, 2023 |
Trade accounts and notes receivable, allowance for doubtful accounts | $ 51,455 | $ 28,873 |
Property, plant and equipment, accumulated depreciation | 159,414 | 159,414 |
Definite lived intangible assets, accumulated amortization | $ 139,521 | $ 138,541 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred shares, authorized (in shares) | 4,000,000 | 4,000,000 |
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, issued (in shares) | 8,466,953 | 8,466,953 |
Common stock, outstanding (in shares) | 7,263,508 | 7,263,508 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred shares, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 3 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
REVENUES | ||
Revenues | $ 835,934 | $ 745,593 |
Selling, general and administrative expenses: | ||
Payroll and payroll-related expenses | 256,329 | 271,719 |
Occupancy | 33,341 | 34,648 |
Advertising and promotion | 364 | 2,801 |
Professional service fees | 51,779 | 53,052 |
Travel | 3,022 | 1,231 |
Employee benefit expenses | 36,804 | 39,322 |
Depreciation and amortization | 980 | 923 |
Marketing fund expenses | 259,411 | 238,318 |
Other | 71,924 | 54,180 |
Total Operating Expenses | 713,954 | 696,194 |
Income from operations | 121,980 | 49,399 |
Interest income | 15,525 | 121 |
Income before provision for income taxes | 137,505 | 49,520 |
Provision for income taxes | ||
Current tax expense | 60,791 | 14,200 |
Deferred tax expense | (21,791) | 0 |
Total Tax Provision. | 39,000 | 14,200 |
Net Income | $ 98,505 | $ 35,320 |
Net Income per share - Basic and Diluted (in dollars per share) | $ 0.01 | $ 0 |
Weighted average shares outstanding - Basic and diluted (in shares) | 7,263,508 | 7,263,508 |
Cash distributions declared per share (in dollars per share) | $ 0.02 | $ 0.02 |
Royalty [Member] | ||
REVENUES | ||
Revenues | $ 459,690 | $ 442,608 |
Franchise [Member] | ||
REVENUES | ||
Revenues | 10,246 | 4,347 |
Licensing Fees and Other Income [Member] | ||
REVENUES | ||
Revenues | 106,587 | 60,320 |
Marketing Fund [Member] | ||
REVENUES | ||
Revenues | $ 259,411 | $ 238,318 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Operating activities | ||
Net Income | $ 98,505 | $ 35,320 |
Adjustments to reconcile net income to cash flows provided by operating activities: | ||
Depreciation and amortization | 980 | 923 |
Deferred tax expense | (21,791) | 0 |
Provision for uncollectible accounts, net of recoveries | 22,582 | 0 |
Noncash lease expense | 24,828 | 24,827 |
Changes in: | ||
Trade accounts receivable and notes/lease receivable | (18,128) | (732) |
Marketing fund contributions receivable | (707) | (15,751) |
Prepaid expenses and other | 3,505 | 29,665 |
Accounts payable | 46,834 | 19,685 |
Accrued liabilities | 46,744 | 5,433 |
Unexpended marketing fund contributions | 29,723 | 77,075 |
Deferred revenue | (10,621) | 32,981 |
Operating lease liability | (30,132) | (29,470) |
Net Cash Provided by Operating Activities | 192,322 | 179,956 |
Cash distributions/dividends | (145,270) | (145,270) |
Net Cash Used In Financing Activities | (145,270) | (145,270) |
Net Increase in Cash and Restricted Cash | 47,052 | 34,686 |
Cash and Restricted Cash - Beginning of Period | 2,072,672 | 1,902,661 |
Cash and Restricted Cash - End of Period | 2,119,724 | 1,937,347 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
Right-of-use operating asset obtained in exchange for operating lease liability | $ 401,430 | $ 0 |
Note 1 - Nature of Operations
Note 1 - Nature of Operations | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | Note 1. Nature of Operations BAB, Inc. (“the Company”) has three The Company was incorporated under the laws of the State of Delaware on July 12, 2000. The Company currently franchises and licenses bagel and muffin retail units under the BAB, MFM and SD trade names. At February 29, 2024, the Company had 64 franchise units and 4 licensed units in operation in 20 states. There are 4 units under development. The Company additionally derives income from the sale of its trademark bagels, muffins and coffee through nontraditional channels of distribution including under licensing agreements. The BAB franchised brand consists of units operating as “Big Apple Bagels®,” featuring daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches and other related products. BAB units are primarily concentrated in the Midwest and Western United States. The MFM brand consists of units operating as “My Favorite Muffin Gourmet Muffin Bakery®” (“MFM Bakery”), featuring a large variety of freshly baked muffins and coffees and units operating as “My Favorite Muffin Your All-Day Bakery Café®” (“MFM Cafe”) featuring these products as well as a variety of specialty bagel sandwiches and related products. The SweetDuet® is a branded self-serve frozen yogurt that can be added as an additional brand in a BAB location. Although the Company doesn't actively market Brewster's stand-alone franchises, Brewster's coffee products are sold in most franchised units. The Company is leveraging on the natural synergy of distributing muffin products in existing BAB units and, alternatively, bagel products and Brewster's Coffee in existing MFM units. The Company expects to continue to realize efficiencies in servicing the combined base of BAB and MFM franchisees. The Company has a minority interest in Athletes HQ Systems, Inc. (“AHQ”). AHQ franchises indoor baseball and softball practice and coaching facilities with knowledgeable instructors. The accompanying condensed consolidated financial statements are unaudited. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted pursuant to such SEC rules and regulations; nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements and the notes hereto should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended November 30, 2023 which was filed February 26, 2024. In the opinion of the Company's management, the condensed consolidated financial statements for the unaudited interim period presented include all adjustments, including normal recurring adjustments, necessary to fairly present the results of such interim period and the financial position as of the end of said period. The results of operations for the interim period are not necessarily indicative of the results for the full year. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | 2. Summary of Significant Accounting Policies Unaudited Consolidated Financial Statements The accompanying unaudited Condensed Consolidated Financial Statements of BAB, Inc. have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the financial statements and accompanying notes are in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates. Reclassifications Certain prior period amounts have been reclassified for consistency with the current year presentation. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard’s main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope, including trade receivables. The amendments in this update broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The guidance in ASU 2016-13 is effective for public companies for fiscal years and for interim periods within those fiscal years beginning after December 15, 2022. The Company adopted ASU 2016-13 in the first quarter of fiscal 2024 and there was no material financial change. Enhanced disclosures are found in the Summary of Significant Accounting Policies. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and treasury notes with banks and equity firms with original maturities of less than 90 days. The balance of bank accounts may, at times, exceed federally insured credit limits. The Company has not experienced any loss in such accounts and believes it is not subject to any significant credit risk related to cash at February 29, 2024. Accounts Receivable and Notes Receivable The Company adopted FASB ASC Topic 326, Financial Instruments - Credit Losses, (“CECL”) with an adoption date of December 1, 2023. As a result, the Company changed its accounting policy for allowance for credit losses and the policy pursuant to CECL is disclosed below. The CECL reserve methodology requires companies to measure expected credit losses on financial instruments based on the total estimated amount to be collected over the lifetime of the instrument. Under the CECL model, reserves may be established against financial asset balances even if the risk of loss is remote or has not yet manifested itself. The Company records specific reserves against account balances of franchisees deemed at-risk when a potential loss is likely or imminent as a result of prolonged payment delinquency (greater than 90 days past due) and where notable credit deterioration has become evident. For financial assets that are not currently deemed at-risk, an allowance is recorded based on expected loss rates derived pursuant to the Company's CECL methodology that assesses four components - historical losses, current conditions, reasonable and supportable forecasts, and a reversion to history, if applicable. The Company considers its portfolio segments to be the following: Accounts Receivable (Franchise-Related Notes Receivable Leases Receivable Accounts Receivables (Vendor Related) Receivable balances by portfolio segment as of February 29, 2024 and November 30, 2023 are as follows: February 29, 2024 November 30, 2023 Accounts Receivable (Franchise Related) $ 58,939 $ 55,781 Accounts Receivable (Vendor Related) 20,950 28,895 Notes Receivable 55,964 30,873 Lease Receivable, Net of Unamortized Interest 36,837 38,306 172,690 153,855 Less: Allowance for Credit Losses (51,455 ) (28,873 ) Total Receivables 121,235 124,982 Less: Current Portion (90,317 ) (92,576 ) Long-Term Receivables $ 30,918 $ 32,406 The Company's internal credit quality indicators for all portfolio segments primarily consider delinquency. Current and collateralized lease receivables have an internal risk rating of Grade I. The Company does not currently have any uncollateralized lease receivables. Past due lease receivables would be assigned an internal risk rating of Grade II-IV, depending on significance of delinquency. For uncollateralized notes receivable, the Company also considers the status of the franchisee note holder and the term of the note. Notes receivable from current franchisees are considered to have an elevated risk of credit loss based on their common origination from past due franchise accounts receivable but have some indication of collectability given ongoing operations (Internal Grade II). Notes receivable due from payers who no longer have an operating franchise are considered to have a high likelihood of credit loss (Internal Grade III). That likelihood increases if the note is outstanding for longer than one year (Internal Grade IV). At February 29, 2024, all notes receivable were due from former franchisees and had an original term over one year. Changes in the allowance for credit losses during the three months ended February 29, 2024 were as follows: Accounts Receivable (Franchise Related) Accounts Receivable (Vendor Related) Notes Receivable Lease Receivable, Net Total Balance at November 30, 2023 $ - $ - $ 28,873 $ - $ 28,873 Adjustments to Allowance for Adoption of ASU 2016-13 - - - - - Write-offs - - - - - Recoveries - - (467 ) - (467 ) Provision for Credit Losses - - 23,049 - 23,049 Balance at February 29, 2024 $ - $ - $ 51,455 $ - $ 51,455 The Company considers a receivable past due 31 days after the payment due date. The delinquency status of receivables (other than accounts receivable) at February 29, 2024 was as follows: Current 0-30 days Past Due 30-60 days Past Due 60-90 days past due Over 90 days past due Total Notes Receivable $ 45,091 $ - $ - $ - $ 10,873 $ 55,964 Lease Receivable, Net of Uamortized Interest 36,837 - - - - 36,837 $ 81,928 $ - $ - $ - $ 10,873 $ 92,801 The fiscal year of origination of the Company's gross notes receivable and lease receivables by risk rating are as follows 2024 2023 2022 2021 2020 Prior Total Risk rating Internal Grade I $ - $ - $ 36,837 $ - $ - $ - $ 36,837 Internal Grade II - - - - - - Internal Grade III 25,610 19,481 - - - 45,091 Internal Grade IV - - - - - 10,873 10,873 Notes and Lease Receivables, Net of Unamortized Interest $ 25,610 $ 19,481 $ 36,837 $ - $ - $ 10,873 $ 92,801 Lease Receivable The Company leases restaurant equipment to a certain franchisee under a sales-type lease agreement. Under the terms of the agreement, title to the equipment passes to the customer once all lease payments have been made and a reasonable buy-out fee is paid. The Company retains title or a security interest in the equipment until such time. The sales and cost of sales are recognized at the inception of the lease. The profit or loss on the issuance of the lease is recorded in the period of commencement. The investment in sales-type leases consists of the sum of the minimum lease payments receivable less unearned interest income and, if applicable, estimated executory cost. Minimum lease payments are part of the lease agreement between the Company (as the lessor) and the franchisee (as the lessee). The discount rate implicit in the lease is used to calculate the present value of minimum lease payments. The minimum lease payments consist of the gross lease payments net of executory costs, if any. Unearned interest income is amortized to income over the lease term to produce a constant periodic rate of return on net investment in the lease. While revenue is recognized at the inception of the lease, the cash flow from the sales-type lease occurs over the course of the lease, which results in interest income and reduction of receivables. Property, Plant and Equipment Property, equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are 3 to 7 years for property and equipment and 10 years, or term of lease if less, for leasehold improvements. Maintenance and repairs are charged to expense as incurred. Expenditures that materially extend the useful lives of assets are capitalized. Other Assets Other assets include a minority investment in AHQ Systems, Inc. The shares were issued to BAB, Inc. as compensation for consulting services and are valued at $2,250. The value of the investment is immaterial and has not been adjusted to fair market value. Advertising and Promotion Costs The Company expenses advertising and promotion costs as incurred. All advertising and promotion costs were related to the Company’s franchise operations. Lease Liabilities The company accounts for leases under ASC 842. Lease arrangements are determined at the inception of the contract. Operating leases are included in operating lease right-of-use (“ROU”) assets and other current and long-term operating lease liabilities on the consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities on the consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company will adopt ASU 2023-09 for fiscal year ending November 30, 2026. Management does not believe that there are any recently issued and effective or not yet effective accounting pronouncements as of February 29, 2024 that would have or are expected to have any significant effect on the Company’s financial position, cash flows or income statement. |
Note 3 - Revenue Recognition
Note 3 - Revenue Recognition | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Revenue from Contract with Customer [Text Block] | 3. Revenue Recognition Statement of Cash Flows The chart below shows the cash and restricted cash within the consolidated statements of cash flows as of February 29, 2024 and February 28, 2023 were as follows: February 29, 2024 February 28, 2023 Cash and cash equivalents $ 1,890,204 $ 1,598,465 Restricted cash 229,520 338,882 Total cash and restricted cash $ 2,119,724 $ 1,937,347 Franchise and related revenue The Company sells individual franchises. The franchise agreements typically require the franchisee to pay an initial, non-refundable fee prior to opening the respective location(s), and continuing royalty fees on a weekly basis based upon a percentage of franchisee net sales. The initial term of franchise agreements are typically 10 years. Subject to the Company’s approval, a franchisee may generally renew the franchise agreement upon its expiration. If approved, a franchisee may transfer a franchise agreement to a new or existing franchisee, at which point a transfer fee is typically paid by the current owner which then terminates that franchise agreement. A franchise agreement is signed with the new franchisee with no franchise fee required. If a contract is terminated prior to its term, it is a breach of contract and a penalty is assessed based on a formula reviewed and approved by management. Revenue generated from a contract breach is termed settlement income by the Company and included in licensing fees and other income. Franchise and related revenue ( continued ) Under the terms of our franchise agreements, the Company typically promises to provide franchise rights, pre-opening services such as blueprints, operational materials, planning and functional training courses, and ongoing services, such as management of the marketing fund. The Company considers certain pre-opening activities and the franchise rights and related ongoing services to represent two separate performance obligations. The franchise fee revenue has been allocated to the two separate performance obligations using a residual approach. The Company has estimated the value of performance obligations related to certain pre-opening activities deemed to be distinct based on cost plus an applicable margin, and assigned the remaining amount of the initial franchise fee to the franchise rights and ongoing services. Revenue allocated to preopening activities is recognized when (or as) these services are performed. Revenue allocated to franchise rights and ongoing services is deferred until the store opens, and recognized on a straight-line basis over the duration of the agreement, as this ensures that revenue recognition aligns with the customer’s access to the franchise right. Royalty fees from franchised stores represent a 5% fee on net retail and wholesale sales of franchised units. Royalty revenues are recognized on an accrual basis using actual franchise receipts. Generally, franchisees report and remit royalties on a weekly basis. The majority of month-end receipts are recorded on an accrual basis based on actual numbers from reports received from franchisees shortly after the month-end. Estimates are utilized in certain instances where actual numbers have not been received and such estimates are based on the average of the last 10 weeks’ actual reported sales. Royalty revenue is recognized during the respective franchise agreement based on the royalties earned each period as the underlying franchise store sales occur. There are two items involving revenue recognition of contracts that require us to make subjective judgments: the determination of which performance obligations are distinct within the context of the overall contract and the estimated stand-alone selling price of each obligation. In instances where our contract includes significant customization or modification services, the customization and modification services are generally combined and recorded as one distinct performance obligation. Gift Card Breakage Revenue The Company sells gift cards to its customers in its retail stores and through its Corporate office. The Company’s gift cards do not have an expiration date and are not redeemable for cash except where required by law. Revenue from gift cards is recognized upon redemption in exchange for product and reported within franchisee store revenue and the royalty and marketing fees are paid and shown in the Condensed Consolidated Statements of Income. Until redemption, outstanding customer balances are recorded as a liability. An obligation is recorded at the time of sale of the gift card and it is included in accrued expenses on the Company’s Condensed Consolidated Balance Sheets. The liability is reduced when the gift cards are redeemed by a franchise. Although there are no expiration dates for our gift cards, based on our analysis of historical gift card redemption patterns, we can reasonably estimate the amount of gift cards for which redemption is remote, which is referred to as “breakage.” The Company recognizes gift card breakage proportional to actual gift card redemptions on a quarterly basis and the corresponding revenue is included in licensing fees and other revenue. Significant judgments and estimates are required in determining the breakage rate and will be reassessed each quarter. Nontraditional and rebate revenue As part of the Company’s franchise agreements, the franchisee purchases products and supplies from designated vendors. The Company may receive various fees and rebates from the vendors and distributors on product purchases by franchisees. In addition, the Company may collect various initial fees, and those fees are classified as deferred revenue in the balance sheet and straight lined over the life of the contract as deferred revenue in the balance sheet. The Company does not possess control of the products prior to their transfer to the franchisee and products are delivered to franchisees directly from the vendor or their distributors. The Company recognizes the rebates as franchisees purchase products and supplies from vendors or distributors and recognizes the initial fees over the contract life and the fees are reported as licensing fees and other income in the Condensed Consolidated Statements of Income. Marketing Fund Franchise agreements require the franchisee to pay continuing marketing fees on a weekly basis, based on a percentage of franchisee sales. Marketing fees are not paid on franchise wholesale sales. The balance sheet includes marketing fund cash, which is the restricted cash, accounts receivable and unexpended marketing fund contributions. Although the marketing fees are not separate performance obligations distinct from the underlying franchise right, the Company acts as the principal as it is primarily responsible for the fulfillment and control of the marketing services. As a result, the Company records marketing fees in revenues and related marketing fund expenditures in expenses in the Condensed Consolidated Statement of Income. The Company historically presented the net activities of the marketing fund within the balance sheet in the Condensed Consolidated Balance Sheet. While this reclassification impacts the gross amount of reported revenue and expenses the amounts will be offsetting, and there is no impact on net income. Disaggregation of Revenue The following table presents disaggregation of revenue from contracts with customers for the three months ended February 29, 2024 and February 28, 2023: Three months ended February 29, 2024 Three months ended February 28, 2023 Revenue recognized at a point in time Sign Shop revenue $ 1,379 $ 156 Settlement revenue 25,610 6,500 Total revenue at a point in time 26,989 6,656 Revenue recognized over time Royalty revenue 459,690 442,608 Franchise fees 10,246 4,347 License fees 5,978 4,147 Gift card revenue 2,846 305 Nontraditional revenue 70,774 49,212 Marketing fund revenue 259,411 238,318 Total revenue over time 808,945 738,937 Grand total $ 835,934 $ 745,593 Contract balances The balance of contract liabilities includes franchise fees, license fees and vendor payments that have ongoing contract rights and the fees are being straight lined over the contract life. Contract liabilities also include marketing fund balances and gift card liability balances. February 29, 2024 November 30, 2023 Liabilities Contract liabilities - current $ 485,180 $ 458,162 Contract liabilities - long-term 157,104 162,026 Total Contract Liabilities $ 642,284 $ 620,188 February 29, 2024 November 30, 2023 Contracts at beginning of period $ 620,188 $ 692,360 Revenue Recognized during period (336,180 ) (1,685,740 ) Additions during period 358,276 1,613,568 Contracts at end of period $ 642,284 $ 620,188 Transaction price allocated to remaining performance obligations (franchise agreements and license fee agreement) for the year ended November 30: 2024 19,668 (a) 2025 25,505 2026 25,280 2027 18,633 2028 18,100 Thereafter 74,313 Total $ 181,499 (a) represents the estimate for the remainder of 2024 |
Note 4 - Units Open and Under D
Note 4 - Units Open and Under Development | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Units Open and Under Development [Text Block] | 4. Units Open and Under Development Units which are open or under development at February 29, 2024 and February 28, 2023 are as follows: February 29, 2024 February 28, 2023 Stores open: Franchisee-owned stores 64 68 Licensed Units 4 4 68 72 Unopened stores with Franchise Agreements 4 2 Total operating units and units with Franchise Agreements 72 74 |
Note 5 - Earnings Per Share
Note 5 - Earnings Per Share | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 5. Earnings per Share The following table sets forth the computation of basic and diluted earnings per share: February 29, 2024 February 28, 2023 Numerator: Net income available to common stockholders $ 98,505 $ 35,320 Denominator: Weighted average outstanding shares Basic and diluted 7,263,508 7,263,508 Earnings per Share - Basic and diluted $ 0.01 $ 0.00 |
Note 6 - Goodwill and Other Int
Note 6 - Goodwill and Other Intangible Assets | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Goodwill and Intangible Assets Disclosure [Text Block] | 6. Goodwill and Other Intangible Assets Accounting Standard Codification (“ASC”) 350 “Goodwill and Other Intangible Assets” requires that assets with indefinite lives no longer be amortized, but instead be subject to annual impairment tests. Following the guidelines contained in ASC 350, the Company tests goodwill and intangible assets that are not subject to amortization for impairment annually or more frequently if events or circumstances indicate that impairment is possible. The Company has elected to conduct its annual test during the first quarter. During the quarter ended February 29, 2024 and February 28, 2023, management qualitatively assessed goodwill to determine whether testing was necessary. Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy, and changes in the composition and carrying amounts of net assets. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than it’s carrying value, a quantitative assessment is then performed. Based on the qualitative analysis conducted during this quarter, management does not |
Note 7 - Lease Receivable Commi
Note 7 - Lease Receivable Commitments | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Lessor, Sales-type Leases [Text Block] | 7. Lease Receivable The Company leases restaurant equipment to a certain franchise under a sales-type lease agreement. The lease agreement does not contain any non-lease components. The lease term is for a period of seven years, beginning June 1, 2022 and ending June 1, 2029. The lease requires weekly payments of $121 for a total 365 payments, and a final optional buy-out payment of $4,800, which management believes estimates residual value. At February 29, 2024, management does not believe the unguaranteed residual asset value of $4,800 to be impaired. During the three months ending February 29, 2024, the Company recorded interest income from the lease receivable of $102. The sales lease is included in the balance sheet at the current value of the lease payments at a 1.25% discount rate, which reflects the rate implicit in the lease agreement. Future minimum lease payments receivable as of February 29, 2024 are as follows: Undiscounted Rent Payments Year Ending November 30: 2024 6,283 2025 6,283 2026 6,283 2027 6,404 2028 6,283 thereafter 6,371 Total Undiscounted Lease Payments 37,907 Unamortized interest income (1,070 ) Lease receivable, net $ 36,837 Short-term lease receivable $ 5,919 Long-term lease receivable 30,918 Total lease receivable $ 36,837 |
Note 8 - Lease Commitments
Note 8 - Lease Commitments | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Commitments Disclosure [Text Block] | 8. Lease Commitments The Company rents its office under an operating lease which requires it to pay base rent, real estate taxes, insurance and general repairs and maintenance. The lease effective during the quarter was signed in June of 2018, effective October 1, 2018, expiring on March 31, 2024. On February 15, 2024, a lease amendment was signed, effective April 1, 2024 for a 6-year period, expiring March 31, 2030, with an option to renew for a 5-year period. The amendment continues to require the Company to pay base rent, real estate taxes, insurance and general repairs and maintenance. The amendment includes a ten-month rent abatement over the lease term, specifically defined in the agreement, and tenant allowance in the amount of $158,940. The tenant allowance is to be applied evenly to the 62 months that were not abated. The renewal option has not been included in the measurement of the lease liability. Monthly rent expense is recognized on a straight-line basis over the term of the lease. At February 29, 2024 the weighted average remaining lease term was 73 months. The lease amendment is reflected in the balance of the Lease Liability on the balance sheet at the present value of the lease payments using an 8.50% discount rate. The discount rate was considered to be an estimate of the Company’s incremental borrowing rate. Gross future minimum annual rental commitments as of February 29, 2024 are as follows: Undiscounted Rent Payments Year Ending November 30: 2024 $ 55,590 2025 77,737 2026 80,837 2027 84,024 2028 96,163 Thereafter 136,725 Total Undiscounted Rent Payments $ 531,076 Present Value Discount (119,638 ) Present Value $ 411,438 Short-term lease liability $ 48,383 Long-term lease liability 363,055 Total Operating Lease Liability $ 411,438 |
Note 9 - Income Taxes
Note 9 - Income Taxes | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 9. Income Taxes For the three months ended February 29, 2024, the Company recorded current and deferred tax expense of $39,000 for an effective tax rate of 28.4% compared to $14,200 of current and deferred tax expense for the three months ended February 28, 2023 for an effective tax rate of 28.7%. |
Note 10 - Stockholder's Equity
Note 10 - Stockholder's Equity | 3 Months Ended |
Feb. 29, 2024 | |
Notes to Financial Statements | |
Equity [Text Block] | 10. Stockholder ’ s Equity On March 6, 2024 the Board of Directors (“Board”) declared a $0.01 quarterly cash distribution, payable on April 12, 2024 to shareholders of record as of March 21, 2024. On December 11, 2023 the Board declared a $0.02 cash distribution/dividend per share, $0.01 quarterly and $0.01 special to stockholders of record as of December 27, 2023, paid January 16, 2024. On September 12, 2023 the Board declared a $0.01 distribution/dividend per share to stockholders of record as of September 28, 2023, payable October 18, 2023. On June 6, 2023 the Board declared a $0.01 distribution/dividend per share to stockholders of record as of June 22, 2023, paid on July 11, 2023. On March 13, 2023 the Board declared a $0.01 distribution/dividend per share to stockholders of record as of March 30, 2023, paid on April 19, 2023. On December 07, 2022 the Board declared a $0.02 cash distribution/dividend per share, $0.01 quarterly and $0.01 special, to stockholders of record as of December 22, 2022, paid January 11, 2023. On September 9, 2022 the Board declared a $0.01 distribution/dividend per share to stockholders of record as of September 28, 2022, paid October 20, 2022. On June 3, 2022 the Board declared a $0.01 distribution/dividend per share to stockholders of record as of June 22, 2022, paid July 11, 2022. On March 7, 2022 the Board declared a $0.01 cash distribution/dividend per share to stockholders of record as of March 29, 2022, paid April 18, 2022. On December 06, 2021 the Board declared a $0.01 cash distribution/dividend per share to stockholders of record as of December 22, 2021, paid January 11, 2022. On May 6, 2013, the Board authorized and declared a dividend distribution of one right for each outstanding share of the common stock of the Company to stockholders of record at the close of business on May 13, 2013. Each right entitles the registered holder to purchase from the Company one one-thousandth of a share of the Series A Participating Preferred Stock of the Company at an exercise price of $0.90 per one-thousandth of a Preferred Share, subject to adjustment. The complete terms of the Rights are set forth in a Preferred Shares Rights Agreement, dated May 6, 2013, between the Company and IST Shareholder Services, as rights agent. The Board adopted the Rights Agreement to protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any person or group, other than exempt person as defined in the agreement, that acquires 15% (or 20% in the case of certain institutional investors who report their holdings on Schedule 13G) or more of the Common Shares without the approval of the Board. As a result, the overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult a merger, tender or exchange offer or other business combination involving the Company that is not approved by the Board. However, neither the Rights Agreement nor the Rights should interfere with any merger, tender or exchange offer or other business combination approved by the Board. Full details about the Rights Plan are contained in a Form 8-K filed by the Company with the U.S. Securities and Exchange Commission on May 7, 2013. On June 18, 2014 an amendment to the Preferred Shares Rights Agreement was filed appointing American Stock Transfer & Trust Company, LLC as successor to Illinois Stock Transfer Company. All original rights and provisions remain unchanged. On August 18, 2015 an amendment was filed to the Preferred Shares Rights Agreement changing the final expiration date to mean the fifth anniversary of the date of the original agreement. All other original rights and provisions remain the same. On May 22, 2017 an amendment was filed extending the final expiration date to mean the seventh anniversary date of the original agreement. All other original rights and provisions remain the same. On February 22, 2019 an amendment was filed extending the final expiration date to mean the ninth anniversary date of the original agreement. All other original rights and provisions remain the same. On March 4, 2021 an amendment was filed extending the final expiration date to mean the eleventh anniversary date of the original agreement. All other original rights and provisions remain the same. On April 4, 2023 an amendment was filed extending the final expiration date to mean the fourteenth anniversary date of the original agreement. All other original rights and provisions remain the same. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Feb. 29, 2024 | |
Insider Trading Arr Line Items | |
Material Terms of Trading Arrangement [Text Block] | ITEM 5. OTHER INFORMATION None |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 3 Months Ended |
Feb. 29, 2024 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Unaudited Consolidated Financial Statements The accompanying unaudited Condensed Consolidated Financial Statements of BAB, Inc. have been prepared pursuant to generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for Form 10-Q. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of the financial statements and accompanying notes are in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates. |
Reclassification, Comparability Adjustment [Policy Text Block] | Reclassifications Certain prior period amounts have been reclassified for consistency with the current year presentation. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard’s main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope, including trade receivables. The amendments in this update broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The guidance in ASU 2016-13 is effective for public companies for fiscal years and for interim periods within those fiscal years beginning after December 15, 2022. The Company adopted ASU 2016-13 in the first quarter of fiscal 2024 and there was no material financial change. Enhanced disclosures are found in the Summary of Significant Accounting Policies. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, demand deposits and treasury notes with banks and equity firms with original maturities of less than 90 days. The balance of bank accounts may, at times, exceed federally insured credit limits. The Company has not experienced any loss in such accounts and believes it is not subject to any significant credit risk related to cash at February 29, 2024. |
Receivable [Policy Text Block] | Accounts Receivable and Notes Receivable The Company adopted FASB ASC Topic 326, Financial Instruments - Credit Losses, (“CECL”) with an adoption date of December 1, 2023. As a result, the Company changed its accounting policy for allowance for credit losses and the policy pursuant to CECL is disclosed below. The CECL reserve methodology requires companies to measure expected credit losses on financial instruments based on the total estimated amount to be collected over the lifetime of the instrument. Under the CECL model, reserves may be established against financial asset balances even if the risk of loss is remote or has not yet manifested itself. The Company records specific reserves against account balances of franchisees deemed at-risk when a potential loss is likely or imminent as a result of prolonged payment delinquency (greater than 90 days past due) and where notable credit deterioration has become evident. For financial assets that are not currently deemed at-risk, an allowance is recorded based on expected loss rates derived pursuant to the Company's CECL methodology that assesses four components - historical losses, current conditions, reasonable and supportable forecasts, and a reversion to history, if applicable. The Company considers its portfolio segments to be the following: Accounts Receivable (Franchise-Related Notes Receivable Leases Receivable Accounts Receivables (Vendor Related) Receivable balances by portfolio segment as of February 29, 2024 and November 30, 2023 are as follows: February 29, 2024 November 30, 2023 Accounts Receivable (Franchise Related) $ 58,939 $ 55,781 Accounts Receivable (Vendor Related) 20,950 28,895 Notes Receivable 55,964 30,873 Lease Receivable, Net of Unamortized Interest 36,837 38,306 172,690 153,855 Less: Allowance for Credit Losses (51,455 ) (28,873 ) Total Receivables 121,235 124,982 Less: Current Portion (90,317 ) (92,576 ) Long-Term Receivables $ 30,918 $ 32,406 The Company's internal credit quality indicators for all portfolio segments primarily consider delinquency. Current and collateralized lease receivables have an internal risk rating of Grade I. The Company does not currently have any uncollateralized lease receivables. Past due lease receivables would be assigned an internal risk rating of Grade II-IV, depending on significance of delinquency. For uncollateralized notes receivable, the Company also considers the status of the franchisee note holder and the term of the note. Notes receivable from current franchisees are considered to have an elevated risk of credit loss based on their common origination from past due franchise accounts receivable but have some indication of collectability given ongoing operations (Internal Grade II). Notes receivable due from payers who no longer have an operating franchise are considered to have a high likelihood of credit loss (Internal Grade III). That likelihood increases if the note is outstanding for longer than one year (Internal Grade IV). At February 29, 2024, all notes receivable were due from former franchisees and had an original term over one year. Changes in the allowance for credit losses during the three months ended February 29, 2024 were as follows: Accounts Receivable (Franchise Related) Accounts Receivable (Vendor Related) Notes Receivable Lease Receivable, Net Total Balance at November 30, 2023 $ - $ - $ 28,873 $ - $ 28,873 Adjustments to Allowance for Adoption of ASU 2016-13 - - - - - Write-offs - - - - - Recoveries - - (467 ) - (467 ) Provision for Credit Losses - - 23,049 - 23,049 Balance at February 29, 2024 $ - $ - $ 51,455 $ - $ 51,455 The Company considers a receivable past due 31 days after the payment due date. The delinquency status of receivables (other than accounts receivable) at February 29, 2024 was as follows: Current 0-30 days Past Due 30-60 days Past Due 60-90 days past due Over 90 days past due Total Notes Receivable $ 45,091 $ - $ - $ - $ 10,873 $ 55,964 Lease Receivable, Net of Uamortized Interest 36,837 - - - - 36,837 $ 81,928 $ - $ - $ - $ 10,873 $ 92,801 The fiscal year of origination of the Company's gross notes receivable and lease receivables by risk rating are as follows 2024 2023 2022 2021 2020 Prior Total Risk rating Internal Grade I $ - $ - $ 36,837 $ - $ - $ - $ 36,837 Internal Grade II - - - - - - Internal Grade III 25,610 19,481 - - - 45,091 Internal Grade IV - - - - - 10,873 10,873 Notes and Lease Receivables, Net of Unamortized Interest $ 25,610 $ 19,481 $ 36,837 $ - $ - $ 10,873 $ 92,801 |
Lease Receivable [Policy Text Block] | Lease Receivable The Company leases restaurant equipment to a certain franchisee under a sales-type lease agreement. Under the terms of the agreement, title to the equipment passes to the customer once all lease payments have been made and a reasonable buy-out fee is paid. The Company retains title or a security interest in the equipment until such time. The sales and cost of sales are recognized at the inception of the lease. The profit or loss on the issuance of the lease is recorded in the period of commencement. The investment in sales-type leases consists of the sum of the minimum lease payments receivable less unearned interest income and, if applicable, estimated executory cost. Minimum lease payments are part of the lease agreement between the Company (as the lessor) and the franchisee (as the lessee). The discount rate implicit in the lease is used to calculate the present value of minimum lease payments. The minimum lease payments consist of the gross lease payments net of executory costs, if any. Unearned interest income is amortized to income over the lease term to produce a constant periodic rate of return on net investment in the lease. While revenue is recognized at the inception of the lease, the cash flow from the sales-type lease occurs over the course of the lease, which results in interest income and reduction of receivables. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant and Equipment Property, equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are 3 to 7 years for property and equipment and 10 years, or term of lease if less, for leasehold improvements. Maintenance and repairs are charged to expense as incurred. Expenditures that materially extend the useful lives of assets are capitalized. |
Other Assets, Policy [Policy Text Block] | Other Assets Other assets include a minority investment in AHQ Systems, Inc. The shares were issued to BAB, Inc. as compensation for consulting services and are valued at $2,250. The value of the investment is immaterial and has not been adjusted to fair market value. |
Advertising Cost [Policy Text Block] | Advertising and Promotion Costs The Company expenses advertising and promotion costs as incurred. All advertising and promotion costs were related to the Company’s franchise operations. |
Lessee, Leases [Policy Text Block] | Lease Liabilities The company accounts for leases under ASC 842. Lease arrangements are determined at the inception of the contract. Operating leases are included in operating lease right-of-use (“ROU”) assets and other current and long-term operating lease liabilities on the consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities on the consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company will adopt ASU 2023-09 for fiscal year ending November 30, 2026. Management does not believe that there are any recently issued and effective or not yet effective accounting pronouncements as of February 29, 2024 that would have or are expected to have any significant effect on the Company’s financial position, cash flows or income statement. |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Feb. 29, 2024 | |
Notes Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | February 29, 2024 November 30, 2023 Accounts Receivable (Franchise Related) $ 58,939 $ 55,781 Accounts Receivable (Vendor Related) 20,950 28,895 Notes Receivable 55,964 30,873 Lease Receivable, Net of Unamortized Interest 36,837 38,306 172,690 153,855 Less: Allowance for Credit Losses (51,455 ) (28,873 ) Total Receivables 121,235 124,982 Less: Current Portion (90,317 ) (92,576 ) Long-Term Receivables $ 30,918 $ 32,406 |
Accounts Receivable, Allowance for Credit Loss [Table Text Block] | Accounts Receivable (Franchise Related) Accounts Receivable (Vendor Related) Notes Receivable Lease Receivable, Net Total Balance at November 30, 2023 $ - $ - $ 28,873 $ - $ 28,873 Adjustments to Allowance for Adoption of ASU 2016-13 - - - - - Write-offs - - - - - Recoveries - - (467 ) - (467 ) Provision for Credit Losses - - 23,049 - 23,049 Balance at February 29, 2024 $ - $ - $ 51,455 $ - $ 51,455 |
Financing Receivable, Past Due [Table Text Block] | Current 0-30 days Past Due 30-60 days Past Due 60-90 days past due Over 90 days past due Total Notes Receivable $ 45,091 $ - $ - $ - $ 10,873 $ 55,964 Lease Receivable, Net of Uamortized Interest 36,837 - - - - 36,837 $ 81,928 $ - $ - $ - $ 10,873 $ 92,801 |
Financing Receivable Credit Quality Indicators [Table Text Block] | 2024 2023 2022 2021 2020 Prior Total Risk rating Internal Grade I $ - $ - $ 36,837 $ - $ - $ - $ 36,837 Internal Grade II - - - - - - Internal Grade III 25,610 19,481 - - - 45,091 Internal Grade IV - - - - - 10,873 10,873 Notes and Lease Receivables, Net of Unamortized Interest $ 25,610 $ 19,481 $ 36,837 $ - $ - $ 10,873 $ 92,801 |
Note 3 - Revenue Recognition (T
Note 3 - Revenue Recognition (Tables) | 3 Months Ended |
Feb. 29, 2024 | |
Notes Tables | |
Schedule of Cash and Cash Equivalents [Table Text Block] | February 29, 2024 February 28, 2023 Cash and cash equivalents $ 1,890,204 $ 1,598,465 Restricted cash 229,520 338,882 Total cash and restricted cash $ 2,119,724 $ 1,937,347 |
Disaggregation of Revenue [Table Text Block] | Three months ended February 29, 2024 Three months ended February 28, 2023 Revenue recognized at a point in time Sign Shop revenue $ 1,379 $ 156 Settlement revenue 25,610 6,500 Total revenue at a point in time 26,989 6,656 Revenue recognized over time Royalty revenue 459,690 442,608 Franchise fees 10,246 4,347 License fees 5,978 4,147 Gift card revenue 2,846 305 Nontraditional revenue 70,774 49,212 Marketing fund revenue 259,411 238,318 Total revenue over time 808,945 738,937 Grand total $ 835,934 $ 745,593 |
Contract With Customer Asset and Liability, Subject to Change [Table Text Block] | February 29, 2024 November 30, 2023 Liabilities Contract liabilities - current $ 485,180 $ 458,162 Contract liabilities - long-term 157,104 162,026 Total Contract Liabilities $ 642,284 $ 620,188 |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] | February 29, 2024 November 30, 2023 Contracts at beginning of period $ 620,188 $ 692,360 Revenue Recognized during period (336,180 ) (1,685,740 ) Additions during period 358,276 1,613,568 Contracts at end of period $ 642,284 $ 620,188 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | 2024 19,668 (a) 2025 25,505 2026 25,280 2027 18,633 2028 18,100 Thereafter 74,313 Total $ 181,499 |
Note 4 - Units Open and Under_2
Note 4 - Units Open and Under Development (Tables) | 3 Months Ended |
Feb. 29, 2024 | |
Notes Tables | |
Schedule of Franchisor Disclosure [Table Text Block] | February 29, 2024 February 28, 2023 Stores open: Franchisee-owned stores 64 68 Licensed Units 4 4 68 72 Unopened stores with Franchise Agreements 4 2 Total operating units and units with Franchise Agreements 72 74 |
Note 5 - Earnings Per Share (Ta
Note 5 - Earnings Per Share (Tables) | 3 Months Ended |
Feb. 29, 2024 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | February 29, 2024 February 28, 2023 Numerator: Net income available to common stockholders $ 98,505 $ 35,320 Denominator: Weighted average outstanding shares Basic and diluted 7,263,508 7,263,508 Earnings per Share - Basic and diluted $ 0.01 $ 0.00 |
Note 7 - Lease Receivable Com_2
Note 7 - Lease Receivable Commitments (Tables) | 3 Months Ended |
Feb. 29, 2024 | |
Notes Tables | |
Sales-Type and Direct Financing Leases, Payment to be Received, Maturity [Table Text Block] | Undiscounted Rent Payments Year Ending November 30: 2024 6,283 2025 6,283 2026 6,283 2027 6,404 2028 6,283 thereafter 6,371 Total Undiscounted Lease Payments 37,907 Unamortized interest income (1,070 ) Lease receivable, net $ 36,837 Short-term lease receivable $ 5,919 Long-term lease receivable 30,918 Total lease receivable $ 36,837 |
Note 8 - Lease Commitments (Tab
Note 8 - Lease Commitments (Tables) | 3 Months Ended |
Feb. 29, 2024 | |
Notes Tables | |
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block] | Undiscounted Rent Payments Year Ending November 30: 2024 $ 55,590 2025 77,737 2026 80,837 2027 84,024 2028 96,163 Thereafter 136,725 Total Undiscounted Rent Payments $ 531,076 Present Value Discount (119,638 ) Present Value $ 411,438 Short-term lease liability $ 48,383 Long-term lease liability 363,055 Total Operating Lease Liability $ 411,438 |
Note 1 - Nature of Operations (
Note 1 - Nature of Operations (Details Textual) | Feb. 29, 2024 | Feb. 28, 2023 |
Number of Wholly Owned Subsidiaries | 3 | |
Number of Stores | 72 | 74 |
Number of States in which Entity Operates | 20 | |
Franchised Units [Member] | ||
Number of Stores | 64 | 68 |
Licensed Units [Member] | ||
Number of Stores | 4 | 4 |
Units Under Development [Member] | ||
Number of Stores | 4 |
Note 2 - Summary of Significa_3
Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | |
Feb. 29, 2024 | Nov. 30, 2023 | |
Financing Receivable, Allowance for Credit Loss | $ 51,455 | $ 28,873 |
Sales-type Lease, Interest Income, Lease Receivable | 1,070 | |
Investment Owned, Fair Value | $ 2,250 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment, Useful Life | 10 years | |
Minimum [Member] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Maximum [Member] | ||
Property, Plant and Equipment, Useful Life | 7 years |
Note 2 - Summary of Significa_4
Note 2 - Summary of Significant Accounting Policies - Summary of Portfolio Segments for Receivables (Details) - USD ($) | Feb. 29, 2024 | Nov. 30, 2023 |
Notes Receivable | $ 55,964 | $ 30,873 |
Lease Receivable, Net of Unamortized Interest | 36,837 | 38,306 |
Total Receivables, Before Allowance for Credit Losses | 172,690 | 153,855 |
Less: Allowance for Credit Losses | (51,455) | (28,873) |
Total Receivables | 121,235 | 124,982 |
Less: Current Portion | (90,317) | (92,576) |
Long-Term Receivables | 30,918 | 32,406 |
Franchise [Member] | ||
Accounts Receivable (Franchise Related) | 58,939 | 55,781 |
Vendor Related [Member] | ||
Accounts Receivable (Franchise Related) | $ 20,950 | $ 28,895 |
Note 2 - Summary of Significa_5
Note 2 - Summary of Significant Accounting Policies - Allowance for Credit Losses (Details) - USD ($) | 3 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Balance at November 30, 2023 | $ 28,873 | |
Balance at November 30, 2023 | 0 | |
Balance at November 30, 2023 | 28,873 | |
Write-offs | 0 | |
Write-offs | 0 | |
Write-offs | 0 | |
Recoveries | (467) | |
Recoveries | 0 | |
Recoveries | (467) | |
Provision for Credit Losses | 22,582 | $ 0 |
Provision for Credit Losses | 23,049 | |
Provision for Credit Losses | 0 | |
Provision for Credit Losses | 23,049 | |
Balance at February 29, 2024 | 51,455 | |
Balance at February 29, 2024 | 0 | |
Balance at February 29, 2024 | 51,455 | |
Accounting Standards Update 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Balance at November 30, 2023 | 0 | |
Balance at November 30, 2023 | 0 | |
Balance at November 30, 2023 | 0 | |
Franchise [Member] | ||
Balance at November 30, 2023 | 0 | |
Write-offs | 0 | |
Recoveries | 0 | |
Provision for Credit Losses | 0 | |
Balance at February 29, 2024 | 0 | |
Franchise [Member] | Accounting Standards Update 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Balance at November 30, 2023 | 0 | |
Vendor Related [Member] | ||
Balance at November 30, 2023 | 0 | |
Write-offs | 0 | |
Recoveries | 0 | |
Provision for Credit Losses | 0 | |
Balance at February 29, 2024 | 0 | |
Vendor Related [Member] | Accounting Standards Update 2016-13 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Balance at November 30, 2023 | $ 0 |
Note 2 - Summary of Significa_6
Note 2 - Summary of Significant Accounting Policies (Details) - USD ($) | Feb. 29, 2024 | Nov. 30, 2023 |
Notes Receivable | $ 55,964 | $ 30,873 |
Lease Receivable, Net of Uamortized Interest | 36,837 | |
Notes and Lease Receivables, Net of Unamortized Interest | 92,801 | |
Financial Asset, Not Past Due [Member] | ||
Notes Receivable | 45,091 | |
Lease Receivable, Net of Uamortized Interest | 36,837 | |
Notes and Lease Receivables, Net of Unamortized Interest | 81,928 | |
Financial Asset, 1 to 29 Days Past Due [Member] | ||
Notes Receivable | 0 | |
Lease Receivable, Net of Uamortized Interest | 0 | |
Notes and Lease Receivables, Net of Unamortized Interest | 0 | |
Financial Asset, 30 to 59 Days Past Due [Member] | ||
Notes Receivable | 0 | |
Lease Receivable, Net of Uamortized Interest | 0 | |
Notes and Lease Receivables, Net of Unamortized Interest | 0 | |
Financial Asset, 60 to 89 Days Past Due [Member] | ||
Notes Receivable | 0 | |
Lease Receivable, Net of Uamortized Interest | 0 | |
Notes and Lease Receivables, Net of Unamortized Interest | 0 | |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | ||
Notes Receivable | 10,873 | |
Lease Receivable, Net of Uamortized Interest | 0 | |
Notes and Lease Receivables, Net of Unamortized Interest | $ 10,873 |
Note 2 - Summary of Significa_7
Note 2 - Summary of Significant Accounting Policies - Schedule of Receivables by Year and Risk Rating (Details) | Feb. 29, 2024 USD ($) |
Internal Grade, year one | $ 25,610 |
Internal Grade, year two | 19,481 |
Internal Grade, year three | 36,837 |
Internal Grade, year four | 0 |
Internal Grade, year five | 0 |
Internal Grade, prior | 10,873 |
Internal Grade, total | 92,801 |
Internal Grade 1 [Member] | |
Internal Grade, year one | 0 |
Internal Grade, year two | 0 |
Internal Grade, year three | 36,837 |
Internal Grade, year four | 0 |
Internal Grade, year five | 0 |
Internal Grade, prior | 0 |
Internal Grade, total | 36,837 |
Internal Grade 2 [Member] | |
Internal Grade, year one | 0 |
Internal Grade, year two | 0 |
Internal Grade, year three | 0 |
Internal Grade, year four | 0 |
Internal Grade, year five | 0 |
Internal Grade, total | 0 |
Internal Grade 3 [Member] | |
Internal Grade, year one | 25,610 |
Internal Grade, year two | 19,481 |
Internal Grade, year three | 0 |
Internal Grade, year four | 0 |
Internal Grade, year five | 0 |
Internal Grade, total | 45,091 |
Internal Grade 4 [Member] | |
Internal Grade, year one | 0 |
Internal Grade, year two | 0 |
Internal Grade, year three | 0 |
Internal Grade, year four | 0 |
Internal Grade, year five | 0 |
Internal Grade, prior | 10,873 |
Internal Grade, total | $ 10,873 |
Note 3 - Revenue Recognition (D
Note 3 - Revenue Recognition (Details Textual) | 3 Months Ended |
Feb. 29, 2024 | |
Initial Franchise Term | 10 years |
Royalty Fees From Franchises Percentage | 5% |
Note 3 - Revenue Recognition -
Note 3 - Revenue Recognition - Schedule of Cash and Cash Equivalents (Details) - USD ($) | Feb. 29, 2024 | Nov. 30, 2023 | Feb. 28, 2023 | Nov. 30, 2022 |
Cash and cash equivalents | $ 1,890,204 | $ 1,888,728 | $ 1,598,465 | |
Restricted cash | 229,520 | 338,882 | ||
Total cash and restricted cash | $ 2,119,724 | $ 2,072,672 | $ 1,937,347 | $ 1,902,661 |
Note 3 - Revenue Recognition _2
Note 3 - Revenue Recognition - Disaggregation of Revenue 2 (Details) - USD ($) | 3 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Revenues | $ 835,934 | $ 745,593 |
Transferred at Point in Time [Member] | ||
Revenues | 26,989 | 6,656 |
Transferred over Time [Member] | ||
Revenues | 808,945 | 738,937 |
Sign Shop [Member] | Transferred at Point in Time [Member] | ||
Revenues | 1,379 | 156 |
Structured Settlement Annuity [Member] | Transferred at Point in Time [Member] | ||
Revenues | 25,610 | 6,500 |
Royalty [Member] | ||
Revenues | 459,690 | 442,608 |
Royalty [Member] | Transferred over Time [Member] | ||
Revenues | 459,690 | 442,608 |
Franchise [Member] | ||
Revenues | 10,246 | 4,347 |
Franchise [Member] | Transferred over Time [Member] | ||
Revenues | 10,246 | 4,347 |
License [Member] | Transferred over Time [Member] | ||
Revenues | 5,978 | 4,147 |
Gift Card [Member] | Transferred over Time [Member] | ||
Revenues | 2,846 | 305 |
Non-traditional Revenue [Member] | Transferred over Time [Member] | ||
Revenues | 70,774 | 49,212 |
Marketing Fund [Member] | ||
Revenues | 259,411 | 238,318 |
Marketing Fund [Member] | Transferred over Time [Member] | ||
Revenues | $ 259,411 | $ 238,318 |
Note 3 - Revenue Recognition _3
Note 3 - Revenue Recognition - Contract Balances Subject to ASC 606 (Details) - USD ($) | Feb. 29, 2024 | Nov. 30, 2023 |
Contract liabilities - long-term | $ 157,104 | $ 162,026 |
Total Contract Liabilities | 642,284 | 620,188 |
Contract Liabilities, Current and Accrued Expenses and Other Current Liabilities [Member] | ||
Contract liabilities - current | $ 485,180 | $ 458,162 |
Note 3 - Revenue Recognition _4
Note 3 - Revenue Recognition - Changes in Contract Balances (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Feb. 29, 2024 | Nov. 30, 2023 | |
Contracts at beginning of period | $ 620,188 | $ 692,360 |
Revenue Recognized during period | (336,180) | (1,685,740) |
Additions during period | 358,276 | 1,613,568 |
Contracts at end of period | $ 642,284 | $ 620,188 |
Note 3 - Revenue Recognition _5
Note 3 - Revenue Recognition - Remaining Performance Obligations (Details) | Feb. 29, 2024 USD ($) |
Remaining Performance Obligation | $ 181,499 |
Note 3 - Revenue Recognition _6
Note 3 - Revenue Recognition - Remaining Performance Obligations 2 (Details) | Feb. 29, 2024 USD ($) | |
Remaining Performance Obligation | $ 181,499 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-03-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 9 months | |
Remaining Performance Obligation | $ 19,668 | [1] |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-03-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 1 year | |
Remaining Performance Obligation | $ 25,505 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-03-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 1 year | |
Remaining Performance Obligation | $ 25,280 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-03-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 1 year | |
Remaining Performance Obligation | $ 18,633 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-03-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 1 year | |
Remaining Performance Obligation | $ 18,100 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-03-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period (Year) | 1 year | |
Remaining Performance Obligation | $ 74,313 | |
[1]represents the estimate for the remainder of 2024 |
Note 4 - Units Open and Under_3
Note 4 - Units Open and Under Development - Operating Units (Details) | Feb. 29, 2024 | Feb. 28, 2023 |
Number of Stores | 72 | 74 |
Franchised Units [Member] | ||
Number of Stores | 64 | 68 |
Licensed Units [Member] | ||
Number of Stores | 4 | 4 |
Total Franchised Owned and Licensed Units [Member] | ||
Number of Stores | 68 | 72 |
Unopened Store [Member] | ||
Number of Stores | 4 | 2 |
Note 5 - Earnings Per Share - C
Note 5 - Earnings Per Share - Computation of Earnings Per Share (Details) - USD ($) | 3 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Net income available to common stockholders | $ 98,505 | $ 35,320 |
Weighted average shares outstanding - Basic and diluted (in shares) | 7,263,508 | 7,263,508 |
Net Income per share - Basic and Diluted (in dollars per share) | $ 0.01 | $ 0 |
Note 6 - Goodwill and Other I_2
Note 6 - Goodwill and Other Intangible Assets (Details Textual) $ in Thousands | 3 Months Ended |
Feb. 29, 2024 USD ($) | |
Goodwill, Impairment Loss | $ 0 |
Note 7 - Lease Receivable Com_3
Note 7 - Lease Receivable Commitments (Details Textual) - USD ($) | 3 Months Ended | |
Jun. 01, 2022 | Feb. 29, 2024 | |
Lessor, Sales Type Lease, Weekly Payments | $ 121 | |
Lessor, Sales-type Lease, Optional Buy-out Payment | $ 4,800 | |
Sales-type Lease, Residual Value of Leased Asset | $ 4,800 | |
Lease Income, Total | $ 102 | |
Lessor, Sales Type Lease, Applicable Discount Rate | 1.25% |
Note 7 - Lease Receivable Com_4
Note 7 - Lease Receivable Commitments - Future Minimum Lease Payments Receivable (Details) - USD ($) | Feb. 29, 2024 | Nov. 30, 2023 |
2024 | $ 6,283 | |
2025 | 6,283 | |
2026 | 6,283 | |
2027 | 6,404 | |
2028 | 6,283 | |
thereafter | 6,371 | |
Total Undiscounted Lease Payments | 37,907 | |
Unamortized interest income | (1,070) | |
Lease receivable, net | 36,837 | |
Lease receivable | 5,919 | $ 5,900 |
Long-term lease receivable | 30,918 | $ 32,406 |
Total lease receivable | $ 36,837 |
Note 8 - Lease Commitments (Det
Note 8 - Lease Commitments (Details Textual) - USD ($) | Feb. 29, 2024 | Feb. 15, 2024 |
Lessee, Operating Lease, Renewal Term | 5 years | |
Tenant Allowance | $ 158,940 | |
Lessee, Operating Lease, Remaining Lease Term | 73 months | |
Lessee, Operating Lease, Discount Rate | 8.50% |
Note 8 - Lease Commitments - Gr
Note 8 - Lease Commitments - Gross Future Minimum Annual Rental Commitments (Details) - USD ($) | Feb. 29, 2024 | Nov. 30, 2023 |
2024 | $ 55,590 | |
Lessee, Operating Lease, Liability, to be Paid, Year Two | 77,737 | |
Lessee, Operating Lease, Liability, to be Paid, Year Three | 80,837 | |
Lessee, Operating Lease, Liability, to be Paid, Year Four | 84,024 | |
Lessee, Operating Lease, Liability, to be Paid, Year Five | 96,163 | |
Thereafter | 136,725 | |
Total Undiscounted Rent Payments | 531,076 | |
Present Value Discount | (119,638) | |
Present Value | 411,438 | |
Short-term lease liability | 48,383 | $ 39,818 |
Long-term lease liability | $ 363,055 | $ 0 |
Note 9 - Income Taxes (Details
Note 9 - Income Taxes (Details Textual) - USD ($) | 3 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Income Tax Expense (Benefit) | $ 39,000 | $ 14,200 |
Effective Income Tax Rate Reconciliation, Percent | 28.40% | 28.70% |
Note 10 - Stockholder's Equity
Note 10 - Stockholder's Equity (Details Textual) - $ / shares | 3 Months Ended | ||||||||||||
Mar. 06, 2024 | Dec. 11, 2023 | Sep. 12, 2023 | Jun. 06, 2023 | Mar. 13, 2023 | Dec. 07, 2022 | Sep. 09, 2022 | Jun. 03, 2022 | Mar. 07, 2022 | Dec. 06, 2021 | Feb. 29, 2024 | Feb. 28, 2023 | May 06, 2013 | |
Common Stock, Dividends, Per Share, Declared | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.02 | |||||||||
Preferred Stock Dividends Number of Rights Minimum Percent of Common Stock that must be Acquired to Make Rights Exercisable | 15% | ||||||||||||
Preferred Stock Dividends Number of Rights Minimum Percent of Common Stock that Must be Acquired to Make Rights Exercisable, Institutional Investors | 20% | ||||||||||||
Right to Purchase Series A Preferred Stock [Member] | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.9 | ||||||||||||
Quarterly Dividend [Member] | |||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Quarterly Dividend [Member] | Subsequent Event [Member] | |||||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.01 |