Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jun. 22, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ARC Group, Inc. | ||
Entity Central Index Key | 1,452,872 | ||
Trading Symbol | arck | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding | 6,883,001 | ||
Entity Public Float | $ 2,072,179 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 50,923 | $ 6,775 |
Accounts receivable, net | 67,395 | 11,724 |
Accounts receivable, net - related party | 14,568 | 65,083 |
Inventory | 45,250 | |
Notes receivable, net | 63,742 | |
Notes receivable, net - related party | 121,638 | |
Interest receivable, net | 838 | |
Interest receivable, net - related party | 11,380 | |
Other current assets | 1,806 | |
Total current assets | 244,522 | 216,600 |
Notes receivable, net of current portion | 29,379 | 6,404 |
Property and equipment, net | 80,948 | |
Equity investment in Paradise on Wings | 570,828 | |
Other assets | 1,806 | |
Total assets | 354,849 | 795,638 |
Liabilities and stockholders' deficit | ||
Accounts payable and accrued expenses | 735,331 | 504,037 |
Accounts payable and accrued expenses - related party | 98,434 | 26,337 |
Accrued interest | 2,594 | 2,173 |
Settlement agreements payable | 253,724 | 452,421 |
Accrued legal settlement | 148,105 | 194,181 |
Notes payable - in default | 7,000 | 7,000 |
Notes payable - related party | 232,572 | |
Contingent consideration | 20,897 | |
Other current liabilities | 5,096 | 5,568 |
Total current liabilities | 1,503,753 | 1,191,717 |
Total liabilities | 1,503,753 | 1,191,717 |
Stockholders' equity deficit: | ||
Class A common stock - $0.01 par value: 100,000,000 shares authorized, 6,647,464 and 6,521,035 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively | 66,475 | 65,211 |
Additional paid-in capital | 3,747,953 | 3,638,466 |
Stock subscriptions payable | 199,863 | 199,863 |
Accumulated deficit | (5,163,195) | (4,299,619) |
Total stockholders' deficit | (1,148,904) | (396,079) |
Total liabilities and stockholders' deficit | $ 354,849 | $ 795,638 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Class A common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Class A common stock, shares authorized | 100,000,000 | 100,000,000 |
Class A common stock, shares issued | 6,647,464 | 6,521,035 |
Class A common stock, shares outstanding | 6,647,464 | 6,521,035 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | ||
Restaurant sales | $ 130,861 | |
Franchise and other revenue | 630,791 | $ 499,231 |
Franchise and other revenue - related party | 513,796 | 467,700 |
Total net revenue | 1,275,448 | 966,931 |
Operating expenses: | ||
Food, beverage and packaging | 28,082 | |
Professional fees | 169,190 | 160,178 |
Employee compensation expense | 584,614 | 585,128 |
General and administrative expenses | 1,008,507 | 175,179 |
Loss on impairment of investment | 348,143 | |
Total operating expenses | 2,138,536 | 920,485 |
Income / (loss) from operations | (863,088) | 46,446 |
Other expense: | ||
Interest expense | (37,703) | (16,452) |
Interest income | 896 | |
Interest income - related party | 6,316 | |
Loss from investment in Paradise on Wings | (222,685) | (247,717) |
Gain / (loss) on settlement of litigation | 82,642 | (221,323) |
Gain on settlement of liabilities | 175,449 | |
Other income | 913 | |
Total other expense | (488) | (479,176) |
Net loss | $ (863,576) | $ (432,730) |
Net loss per share - basic and fully diluted | $ (0.13) | $ (0.07) |
Weighted average number of shares outstanding - basic and fully diluted | 6,608,225 | 6,500,294 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Common Stock | Additional Paid-in Capital | Stock Subscriptions Receivable | Stock Subscriptions Payable | Accumulated Deficit | Total |
Balance at Dec. 28, 2014 | $ 63,625 | $ 3,564,309 | $ (170,000) | $ 289,452 | $ (3,866,889) | $ (119,503) |
Balance (in shares) at Dec. 28, 2014 | 6,362,464 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued for services | $ 1,015 | 57,586 | 411 | $ 59,012 | ||
Common stock issued for services (in shares) | 101,429 | |||||
Common stock issued for settlement of litigation | $ 571 | 16,571 | (90,000) | $ (72,858) | ||
Common stock issued for settlement of litigation (in shares) | 57,142 | |||||
Common stock issued for note receivable - related party | 170,000 | $ 170,000 | ||||
Net loss | (432,730) | (432,730) | ||||
Balance at Dec. 31, 2015 | $ 65,211 | 3,638,466 | 199,863 | (4,299,619) | $ (396,079) | |
Balance (in shares) at Dec. 31, 2015 | 6,521,035 | 6,521,035 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued for services | $ 914 | 90,286 | $ 91,200 | |||
Common stock issued for services (in shares) | 91,429 | |||||
Common stock issued for settlement of liabilities | $ 350 | 19,201 | $ 19,551 | |||
Common stock issued for settlement of liabilities (in shares) | 35,000 | |||||
Net loss | (863,576) | (863,576) | ||||
Balance at Dec. 31, 2016 | $ 66,475 | $ 3,747,953 | $ 199,863 | $ (4,815,052) | $ (1,148,904) | |
Balance (in shares) at Dec. 31, 2016 | 6,647,464 | 6,647,464 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (863,576) | $ (432,730) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation expense | 507 | |
Stock-based compensation expense | 91,200 | 59,012 |
Gain / (loss) on settlement of litigation | (82,642) | 221,323 |
Gain on settlement of liabilities | (175,449) | |
Loss on investment in Paradise on Wings | 222,685 | 247,717 |
Loss on impairment of investment | 348,143 | |
Seediv compensation expense | 251,309 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (55,671) | (11,724) |
Accounts receivable - related party | 50,515 | (22,051) |
Inventory | (4,676) | |
Notes receivable | (86,717) | |
Interest receivable | (838) | |
Interest receivable - related party | 11,380 | (6,316) |
Other assets | 6,538 | (706) |
Accounts payable and accrued liabilities | 103,390 | (1,183) |
Accrued liabilities - related party | 72,097 | 8,439 |
Advertising fund liabilities | (31,474) | |
Settlement agreements payable | 15,052 | (88,635) |
Other liabilities | (51) | 975 |
Net cash used by operating activities | (96,804) | (57,353) |
Cash flows from investing activities | ||
Issuance of notes receivable - related party | (419,849) | (297,918) |
Repayments of notes receivable | 4,586 | |
Repayments of notes receivable - related party | 541,487 | 194,880 |
Purchases of fixed assets | (1,213) | |
Acquisition of Seediv | 4,424 | |
Net cash provided / (used) by investing activities | 124,849 | (98,452) |
Cash flows from financing activities | ||
Proceeds from issuance of notes payable - related party | 840,353 | 1,987,953 |
Repayments of notes payable | (4,000) | |
Repayments of notes payable - related party | (824,250) | (1,991,373) |
Proceeds from stock subscriptions receivable - related party | 170,000 | |
Net cash provided by financing activities | 16,103 | 162,580 |
Net decrease in cash and cash equivalents | 44,148 | 6,775 |
Cash and cash equivalents, beginning of period | 6,775 | |
Cash and cash equivalents, end of period | 50,923 | 6,775 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | ||
Cash paid for income taxes | ||
Schedule of non-cash financing activities | ||
Stock issued for stock subscriptions payable | 49,452 | |
Stock issued for settlement of litigation | $ 19,551 | $ 90,000 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Description Of Business [Abstract] | |
Description of Business | Note 1. Description of Business ARC Group, Inc., a Nevada corporation , was incorporated in April 2000. Dick’s Wings ® Dick’s Wings & Grill ® . On December 19, 2016, the Company acquired all of the issued and outstanding membership interests of Seediv, LLC, a Louisiana limited liability company (“Seediv”), for $600,000 and an earn-out payment. Seediv is the owner and operator of the Dick’s Wings & Grill restaurant located at 100 Marketside Avenue, Suite 301, in the Nocatee development in Ponte Vedra, Florida 32081 (the “Nocatee Restaurant”) and the Dick’s Wings & Grill restaurant located at 6055 Youngerman Circle in Argyle Village in Jacksonville, Florida 32244 (the “Youngerman Circle Restaurant”; together with the Nocatee Restaurant, the “Nocatee and Youngerman Restaurants”). A description of the Company’s acquisition of Seediv is set forth herein under Note 5 – Acquisition of Seediv At December 31, 2016, the Company had 23 restaurants and two concession stands. Of the 23 restaurants, 18 were located in Florida and five were located in Georgia. The Company’s concession stands are also located in Florida. Two of the Company’s restaurants are owned by the Company, and the remaining 21 restaurants are owned and operated by franchisees. The operation of the Company’s concession stands at EverBank Field has been assigned to a third-party operator. The Company establishes franchised restaurants by entering into franchise agreements with qualified parties. It |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies This summary of significant accounting policies is provided to assist the reader in understanding the Company’s financial statements. The financial statements and notes thereto are representations of the Company’s management. The Company’s management is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and have been consistently applied in the preparation of the financial statements. Basis of Presentation The Company’s financial statements have been prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. All intercompany accounts and transactions were eliminated in consolidation. Going Concern As shown in the accompanying financial statements, the Company incurred net losses of $863,576 and $432,730 for the years ended December 31, 2016 and 2015, respectively, and experienced negative cash flows from operations for each of those years. The Company also had an accumulated deficit of $5,163,195 and a working capital deficit of $1,259,231 at December 31, 2016. Those facts create an uncertainty about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its successfully executing its plans to generate positive cash flows during its 2017 fiscal year. The Company’s financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Reclassifications Certain amounts in the Company’s financial statements for the 2015 fiscal year have been reclassified to conform to the 2016 fiscal year presentation. These reclassifications did not result in any change to the previously reported total assets, net loss or stockholders’ deficit. Segment Disclosure The Company has a single brand, all of the restaurants of which operate in the full-service casual dining industry in the United States. Pursuant to the standards of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting Franchise Operations The Company enters into franchise agreements with each of its franchisees to build and operate restaurants using the Dicks Wings brand within a defined geographic area. The agreements have a 10-year term and can be renewed for one additional 10-year term. The Company provides the use of its Dick’s Wings trademarks and Dick’s Wings system, which includes uniform operating procedures, standards for consistency and quality of products, technical knowledge, and procedures for accounting, inventory control and management, in return for the . Franchisees are required to operate their restaurants in compliance with their franchise agreements, which includes adherence to operating and quality control procedures established by the Company. The Company is not required to provide loans, leases, or guarantees to franchisees or the franchisees’ employees and vendors. If a franchisee becomes financially distressed, the Company is not required to provide financial assistance. If financial distress leads to insolvency of the franchisee or the filing of a petition by or against the franchisee under bankruptcy laws, the Company has the right, but not the obligation, to acquire the franchise at fair value as determined by an independent appraiser selected by the Company. Franchisees generally remit royalty payments weekly for the prior week’s sales. Franchise and area development fees are paid upon the signing of the related franchise agreements. Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less on the date of purchase to be cash equivalents in accordance with ASC Topic 305, Cash and Cash Equivalents Accounts Receivable Accounts receivable are recorded in accordance with ASC Topic 310, Receivables of contractually-determined receivables primarily for Accounts receivable, net of the allowance for doubtful accounts, represents the estimated net realizable value of the Company’s accounts receivable. Provisions for doubtful accounts are recorded based on historical collection experience, the age of the receivables and current economic conditions. The accounts receivable balance at December 31, 2016 was comprised primarily of credit card sales by Company-owned restaurants and unpaid royalties due from one of the Company’s franchisees that was behind in its payments, all of which the Company collected in full in early 2017. Accordingly, the allowance for doubtful accounts was zero at December 31, 2016. The accounts receivable balance at December 31, 2015 was comprised primarily of unpaid royalties, franchisee fees and licensing fees due from one of the Company’s franchisees that was behind in its payments, all of which the Company collected in full during the year ended December 31, 2016. Accordingly, the allowance for doubtful accounts was zero at December 31, 2015. Inventory Inventory consists primarily of food and beverage products and is accounted for at the lower of cost or market using the first in, first out method of inventory valuation in accordance with ASC Topic 330, Inventory Property and Equipment Property and equipment is recorded at cost, less accumulated depreciation and amortization, in accordance with ASC Topic 360, Property, Plant and Equipment Leasehold improvements, which include the cost of improvements funded by landlord incentives or allowances, are amortized using the straight-line method over the lesser of the term of the lease, with consideration of renewal options if renewals are reasonably assured because failure to renew would result in an economic penalty, or the estimated useful lives of the assets. Furniture and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. The Company reviews property and equipment for impairment at least quarterly and whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable in accordance with ASC 360. Recoverability is measured by comparison of the carrying amount of the assets to the future undiscounted net cash flows that the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Long-Lived Assets The Company reviews long-lived assets for impairment at least quarterly or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable in accordance with ASC 360. Assets are reviewed at the lowest level for which cash flows can be identified, which is at the individual restaurant level. The Company evaluates the recoverability of a restaurant’s long-lived assets, including buildings, intangibles, leasehold improvements, furniture, fixtures, and equipment over the remaining life of the primary asset in the asset group, after considering the potential impact of planned operational improvements, marketing programs, and anticipated changes in the trade area. In determining future cash flows, significant estimates are made by management with respect to future operating results for each restaurant over the remaining life of the primary asset in the asset group. If assets are determined to be impaired, the impairment charge is measured by calculating the amount by which the asset carrying amount exceeds its fair value based on the Company’s estimate of discounted future cash flows. The Company accounts for exit or disposal activities, including restaurant closures, in accordance with ASC Topic 420, Exit or Disposal Cost Obligations Financial Instruments The Company accounts for its financial instruments in accordance with ASC Topic 825, Financial Instruments Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the Company’s principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. In accordance with ASC Topic 820, Fair Value Measurements and Disclosures The levels of fair value hierarchy are: Level 1: Quoted prices in active markets for identical assets and liabilities at the measurement date; Level 2: Observable inputs other than quoted prices included in Level 1, such as: (i) quoted prices for similar assets and liabilities in active markets, (ii) quoted prices for identical or similar assets and liabilities in markets that are not active, and (iii) other inputs that are observable or can be corroborated by observable market data; and Level 3: Unobservable inputs for which there is little or no market data available. A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. In contrast, the Company considers unobservable data to be data that reflects the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Investment in Paradise on Wings On January 20, 2014, the Company purchased a 50% ownership interest in Paradise on Wings Franchise Group, LLC, a Utah limited liability company that is the franchisor of the Wing Nutz ® Note 4. Investment in Paradise on Wings The Company accounted for its investment in Paradise on Wings under the equity method of accounting in accordance with ASC Topic 323 Investments – Equity Method and Joint Ventures The Company reviews its investment in Paradise on Wings for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable in accordance with ASC 323. The standard for determining whether an impairment must be recorded under ASC 323 is whether an “other-than-temporary” decline in value of the investment has occurred. The evaluation and measurement of impairments under ASC 323 involves Acquisition of Seediv On December 19, 2016, the Company acquired all of the issued and outstanding membership interests of Seediv. A description of the Company’s acquisition of Seediv is set forth herein under Note 5. Acquisition of Seediv. The Company determined that the acquisition of Seediv constituted a business combination as defined by ASC Topic 805, Business Combinations Note 5. Acquisition of Seediv Fair Value Measurements and Disclosures General Advertising Fund The Company has established a general advertising fund that it uses to pay for advertising costs, sales promotions, market research and other support functions intended to maximize general public recognition and acceptance of the Dick’s Wings brand. Company-owned and franchised restaurants are required to contribute at least 1%, but not more than 2%, of their gross revenue to the Company’s general advertising fund. Contributions made by franchisees to the general advertising fund and marketing and advertising expenses paid by the general advertising fund are not recognized as revenues and expenses. They instead constitute agency transactions. These contributions are recorded as a liability against which specific costs are charged. Revenue Recognition The Company’s revenue consists primarily of proceeds from the sale of food and beverage products at its Company-owned restaurants, and royalty payments, franchise fees and area development fees that it receives from its franchisees. Revenue Recognition The Company records revenue from the sale of food and beverages as products are sold. Royalties are accrued as earned and are calculated each period based on restaurant sales. Franchise fees from individual franchise sales is recognized upon the opening of the franchised restaurant when all material obligations and initial services to be provided by the Company have been performed. Area development fees are dependent upon the number of restaurants in the territory, as are the Company’s obligations under the area development agreement. Consequently, as obligations are met, area development fees are recognized proportionally with expenses incurred with the opening of each new restaurant and any royalty-free periods. The Company records gift cards under a Dick’s Wings system-wide program. Gift cards sold are recorded as a gift card liability. When redeemed, the gift card liability account is offset by recording the transaction as revenue. Breakage income represents the value associated with the portion of gift cards sold that will most likely never be redeemed. Based on the Company’s historical gift card redemption patterns and the fact that the Company’s gift cards have no expiration dates or dormancy fees, the Company can reasonably estimate the amount of gift card balances for which redemption is remote and record breakage income based on this estimate. The Company updates its estimate of the breakage rate periodically and, if necessary, adjusts the gift card liability balance accordingly. The Company had gift card liability of $5,096 and $3,396 at December 31, 2016 and 2015, respectively. These amounts were included in other current liabilities in the Company’s Consolidated Balance Sheet. Payments Received From Vendors Vendor allowances include allowances and other funds that the Company receives from vendors. Certain of these funds are determined based on various quantitative contract terms. The Company also receives vendor allowances from certain manufacturers and distributors calculated based upon purchases made by franchisees. Vendor allowances reduction in costs. The Company generally receives payment from vendors approximately 30 days from the end of a month for that month’s purchases. The Company received vendor allowances of $78,023 and $33,325 during the years ended December 31, 2016 and 2015, respectively. Stock-Based Compensation The Company accounts for employee stock-based compensation in accordance with the fair value recognition provisions of ASC Topic 718, Compensation – Stock Compensation The Company accounts for non-employee stock-based compensation in accordance with ASC 718 and ASC Topic 505, Equity The Company uses the Black-Scholes pricing model to determine the fair value of the stock-based compensation that it grants to employees and non-employees. The Black-Scholes pricing model takes into consideration such factors as the estimated term of the securities, the conversion or exercise price of the securities, the volatility of the price of the Company’s common stock, interest rates, and the probability that the securities will be converted or exercised to determine the fair value of the securities. The selection of these criteria requires management’s judgment and may impact the Company’s net income or loss. The computation of volatility is intended to produce a volatility value that is representative of the Company’s expectations about the future volatility of the price of its common stock over an expected term. The Company used its share price history to determine volatility and cannot predict what the price of its shares of common stock will be in the future. As a result, the volatility value that the Company calculated may differ from the actual volatility of the price of its shares of common stock in the future. The Company recognized stock compensation expense of $91,200 and $59,012 during the years ended December 31, 2016 and 2015, respectively. Operating Leases Rent expense for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty such that the renewal appears reasonably assured. The straight-line rent calculation and rent expense includes the rent holiday period, which is the period of time between taking control of a leased site and the rent commencement date. The amount by which straight-line rent exceeds actual lease payment requirements in the early years of the lease is accrued as deferred rent liability and reduced in later years when the actual cash payment requirements exceed the straight-line expense. Contingent rents are generally amounts due as a result of sales in excess of amounts stipulated in certain restaurant leases and are included in rent expense as they are incurred. Landlord contributions are recorded when received as a deferred rent liability and amortized as a reduction of rent expense on a straight-line basis over the lease term. Marketing and Advertising Contributions to the national advertising fund related to Company-owned restaurants are expensed as contributed and local advertising costs for Company-owned restaurants are expensed as incurred. Start-Up Costs Start-up costs consists of costs associated with the opening of new Company-owned restaurants and varies based on the number of new locations opening and under construction. These costs are expensed as incurred in accordance with ASC Topic 720, Other Expenses Sales Taxes Sales taxes collected from customers are excluded from revenue. Sales taxes payable are included in accrued expenses until the taxes are remitted to the appropriate taxing authorities in accordance with ASC 450, Contingencies Income Taxes The Company uses the liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes Net deferred tax assets were comprised of the following at December 31, 2016 and 2015, respectively: December 31, December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 965,216 $ 908,297 Deferred tax liabilities — — Valuation allowance (965,216 ) (908,297 ) Net deferred tax asset $ — $ — The Company had net operating loss carry-forwards of approximately $2,533,376 and $2,383,982 at December 31, 2016 and 2015, respectively, that may be offset against future taxable income. No tax benefit has been reported in the financial statements for the Company’s 2016 and 2015 fiscal years because the potential tax benefit is offset by a valuation allowance of the same amount. The Company had no uncertain tax positions at December 31, 2016 and 2015. Utilization of net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations contained in the Internal Revenue Code of 1986, as amended, as well as similar state and foreign provisions. These ownership changes may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income and tax, respectively. On November 2, 2012, William D. Leopold purchased 2,218,572 shares of the Company’s common stock, which represented approximately 41.2% of the outstanding shares of the Company’s common stock on that date, from Michael Rosenberger, who was then serving as the Company’s Chief Executive Officer, Chief Financial Officer, Secretary and sole member of the Company’s board of directors. This transaction could be deemed to have resulted in a change in ownership of the Company. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue With Contracts From Customers In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory In February 2016, the FASB issued ASU 2016-02, Leases on its financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Payments The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or that no material effect is expected on the Company’s financial statements as a result of future adoption. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 3. Net Loss Per Share The Company calculates basic and diluted net loss per share in accordance with ASC Topic 260, Earnings per Share All of the shares of common stock underlying exercisable or convertible securities that were outstanding at December 31, 2016 and 2015 were excluded from the computation of diluted net loss per share for the years ended December 31, 2016 and 2015 because they were anti-dilutive. As a result, basic net loss per share was equal to diluted net loss per share for the years ended December 31, 2016 and 2015 . |
Investment in Paradise on Wings
Investment in Paradise on Wings | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Paradise on Wings | Note 4. Investment in Paradise on Wings On January 20, 2014, the Company entered into a contribution agreement with Paradise on Wings. In connection with the execution of the contribution agreement, on January 20, 2014, the Company and the incumbent members of Paradise on Wings entered into an amended and restated operating agreement of Paradise on Wings to reflect the terms of the contribution agreement. The transactions contemplated by the contribution agreement and operating agreement were completed on January 20, 2014. Under the terms of the contribution agreement, the Company (sometimes referred to herein as the “Class B Member”) acquired 117.65 Class B membership interests in Paradise on Wings, representing all of the outstanding Class B membership interests and a 50% ownership interest in Paradise on Wings (the “Class B Membership Interests”). The incumbent members of Paradise on Wings (the “Class A Members”) converted their existing membership interests into a total of 117.65 Class A membership interests in Paradise on Wings, representing all of the outstanding Class A membership interests and a 50% ownership interest in Paradise on Wings (the “Class A Membership Interests”). The Company agreed to pay $400,000 in cash, of which $350,000 was paid prior to closing and $50,000 was due upon closing, and $400,000 in shares of the Company’s common stock to Paradise on Wings in consideration for the Class B Membership Interests (the “Capital Contribution”). The shares of common stock (the “ARC Shares”) were valued based upon the opening bid price of the common stock on the OTCmarkets.com on the morning of the closing date, which was $1.70 per share. Accordingly, the Company issued 235,295 shares of common stock to Paradise on Wings on the closing date. Under the operating agreement, the power to manage the business and affairs of Paradise on Wings has been vested in the managers of Paradise on Wings. The Class A Members may appoint up to two managers, which manager(s) have a total of 50% of the vote of all managers. The Company, as the owner of all of the Class B Membership Interests, may appoint one manager who has a total of 50% of the vote of all managers. Notwithstanding the foregoing, the Contributed Capital may not be used to pay salaries or bonuses to any of the Class A Members or Class B Members, and the vote of 60% of the total outstanding Class A Membership Interests and Class B Membership Interests is required in the event Paradise on Wings wishes to use the Contributed Capital for any permitted purpose. The Class A Membership Interests are identical to the Class B Membership Interests in all respects except that the Class A Membership Interests have a preferred right to distributions from Paradise on Wings with respect to the ARC Shares. The Class A Members, through their ownership of the Class A Membership Interests, are entitled to receive a total of 50% of all items of income, gain, losses, deductions and expenses (including 100% of any such items associated with the ARC Shares), and the Company, through its ownership of the Class B Membership Interests, is entitled to receive 50% of all items of income, gain, losses, deductions and expenses (with the exception of any such items associated with the ARC Shares). The Company accounts for its 50% ownership interest in Paradise on Wings using the equity method of accounting because the Company has the ability to exert significant influence, but not control, over the operating and financial policies of Paradise on Wings. The investment was initially recorded and subsequently adjusted for the Company’s share of the net income and loss, and cash contributions and distributions, to or from Paradise on Wings. The Company reported its income from Paradise on Wings as income from investment in Paradise on Wings in its statements of operations, and reported its investment in Paradise on Wings as equity investment in Paradise on Wings in its balance sheets. Set forth below is a summary of the unaudited income statement of Paradise on Wings for the years ended December 31, 2016 and 2015 provided to the Company by Paradise on Wings. Statement of Operations Year Year Revenue $ 384,653 $ 348,781 Operating expenses (830,023 ) (585,384 ) Loss from operations (445,370 ) (236,603 ) Other expense — (258,832 ) Net loss $ (445,370 ) $ (495,435 ) Company’s share of net loss $ (222,685 ) $ (247,717 ) Set forth below is a summary of the unaudited balance sheet of Paradise on Wings at December 31, 2016 and 2015 provided to the Company by Paradise on Wings. Balance Sheet December 31, December 31, Current assets $ 3,549 $ 62,460 Equity investment 141,168 141,168 Total assets $ 144,717 $ 203,628 Total liabilities $ 110,596 $ 101,023 Equity 34,121 102,605 Total liabilities and equity $ 144,717 $ 203,628 The Company performed a review of its investment in Paradise on Wings at the end of the year ended December 31, 2016 and determined, for the reasons more fully described in Note 8. Fair Value Measurements |
Acquisition of Seediv
Acquisition of Seediv | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition of Seediv | Note 5. Acquisition of Seediv On December 19, 2016, the Company entered into a membership interest purchase agreement with Seenu G. Kasturi pursuant to which the Company agreed to acquire all of the issued and outstanding membership interests of Seediv from Mr. Kasturi. Seediv is the owner and operator of the Nocatee and Youngerman Restaurants The Company agreed to pay Mr. Kasturi $600,000 for the membership interests on the closing date, consisting of: (a) a cash payment of $13,665, (b) the cancellation and termination of accounts receivable originally owed to the Company by DWG Acquisitions, LLC, a Louisiana limited liability company (“DWG Acquisitions”), and subsequently transferred to Seediv, in the amount of $259,123, and (c) the cancellation and termination of debt originally owed to the Company by Raceland QSR, LLC, a Louisiana limited liability company (“Raceland QSR”), and subsequently transferred to Seediv, in the amount of $327,212. The Company also agreed to pay Mr. Kasturi an earn-out payment (the “Earn-Out Payment”) calculated as follows: (x) the amount equal to: (i) 5.5, multiplied by the sum of plus less provided, however At any time on or prior to April 16, 2018, Mr. Kasturi may elect to receive all or part of the Earn-Out Payment in the form of shares of the Company’s common stock; provided, however, OTCQB m As of December 19, 2016, Mr. Kasturi owned approximately 14.8% of the Company’s issued and outstanding shares of Common Stock and all of the . In addition, as of December 19, 2016, he served as the President, Treasurer and Secretary, and as the sole member of the board of directors, of Blue Victory Holdings, Inc., a Nevada corporation (“Blue Victory”), and owned 90% of the equity interests in Blue Victory. Blue Victory loaned the Company during the years ended December 31, 2016 and 2015, respectively. As of December 19, 2016, Mr. Kasturi As of December 19, 2016, Fred D. Alexander served as a member of the Company’s board of directors and as an executive officer of Blue Victory. The acquisition was accounted for as a business combination. Based upon its analysis of the above facts, the Company determined that the acquisition of Seediv was a related-party transaction. Accordingly, the assets acquired and liabilities assumed were recorded based on their cost basis at the time of the acquisition and the excess of the purchase price over the aggregate cost basis of the net assets acquired was allocated to Seediv compensation expense. The assets acquired and liabilities assumed were comprised of the following: Cash and cash equivalents $ 18,089 Inventory 40,574 Other current assets 6,538 Leasehold improvements, net 46,541 Furniture and equipment, net 33,701 Total assets acquired 145,443 Accounts payable – related party (1,026 ) Accrued expenses (126,878 ) Notes payable – related party (234,286 ) Total liabilities assumed (362,190 ) Seediv compensation expense 251,309 Net consideration paid $ 34,562 In connection with the acquisition of Seediv, the Company recorded $20,897 of contingent consideration as the estimated initial fair value of the Earnout Payment. A description of the manner by which the Earnout Payment was valued is set forth herein under Note 8. Fair Value Measurements The following table summarizes certain unaudited pro forma financial information as if the acquisition of Seediv had occurred on January 1, 2015: Year Year Revenue $ 4,643,904 $ 4,316,518 Loss from continuing operations (895,371 ) (107,918 ) Net loss (1,516,949 ) (587,094 ) Net loss per share – basic and fully diluted $ (0.23 ) $ (0.09 ) The results of operations for Seediv were included in the Company's results of operations beginning December 19, 2016. The actual amounts of revenue and net income for Seediv that are included in the Company’s Consolidated Statements of Operations for the period of December 19, 2016 to December 31, 2016 were $130,861 and $13,210, respectively. Acquisition-related costs were $50,000 during the year ended December 31, 2016 and are included in general and administrative expense in the Company’s Consolidated Statement of Operations. These non-recurring costs have been eliminated from the unaudited pro forma net income from continuing operations for the year ended December 31, 2016. The unaudited pro forma financial information has been presented for informational purposes only and is not necessarily indicative of the actual results that would have occurred had the acquisition been consummated on January 1, 2015 or of the future results of the combined entities. For additional information about the Company’s acquisition of Seediv, please refer to the Company’s Current Report on Form 8-K and Current Report on Form 8-K/A filed with the Securities and Exchange Commission on December 23, 2016 and April 28, 2017, respectively. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 6. Inventory Inventory was comprised of the following at : December 31, December 31, Food $ 25,942 $ -0- Beverages 19,308 -0- Total $ 45,250 $ -0- |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 7. Property and Equipment, Net Property and equipment were comprised of the following at December 31, 2016 and 2015, respectively: December 31, December 31, Leasehold improvements $ 62,125 $ -0- Furniture, fixtures and equipment 50,140 -0- Subtotal 112,265 -0- Less: accumulated depreciation (31,317 ) -0- Total $ 80,948 $ -0- Depreciation expense was $507 during the year ended December 31, 2016. The Company did not incur any depreciation expense during the year ended December 31, 2015. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 8. Fair Value Measurements On January 20, 2014, the Company purchased a 50% ownership interest in Paradise on Wings. On December 19, 2016, the Company acquired all of the issued and outstanding membership interests of Seediv. A description of the investment in Paradise on Wings and the acquisition of Seediv is set forth herein under Note 4. Investment in Paradise on Wings Note 5. Acquisition of Seediv, The Company performed a review of its investment in Paradise on Wings at the end of the year ended December 31, 2016 to determine whether an impairment must be recorded. As described more fully in Note 4. Investment in Paradise on Wings Note 2. Significant Account Policies – Investment in Paradise on Wings In connection with the acquisition of Seediv, the Company agreed to pay contingent consideration in the form of an earn-out payment. The Company determined that the fair value of the liability for the contingent consideration was estimated to be $20,897 at the acquisition date. The fair value of this liability did not change from the initial valuation calculated on the acquisition date. The Company determined the fair value of the contingent consideration based on a probability-weighted approach derived from earn-out criteria estimates and a probability assessment with respect to the likelihood of achieving the earn-out criteria. The measurement was based upon significant inputs not observable in the market, including internal projections and an analysis of the target markets. At each reporting date, the Company revalues the contingent consideration to the reporting date fair value and records increases and decreases in the fair value as income or expense under general and administrative expenses in the Company’s Consolidated Statements of Operations. Increases or decreases in the fair value of the contingent consideration may result from, among other things, changes in discount periods and rates, changes in the timing and amount of earn-out criteria, and changes in probability assumptions with respect to the likelihood of achieving the various earn-out criteria. The following table presents the Company’s equity investment in Paradise on Wings and contingent consideration recorded by the Company in connection with the acquisition of Seediv within the fair value hierarchy utilized to measure fair value on a recurring basis at December 31, 2016 and 2015, respectively: Level 1 Level 2 Level 3 Equity investment in Paradise on Wings: December 31, 2016 $ -0- $ -0- $ -0- December 31, 2015 $ -0- $ 570,828 $ -0- Contingent consideration: December 31, 2016 $ -0- $ -0- $ 20,897 December 31, 2015 $ -0- $ -0- $ -0- The fair value measurement of the equity investment in Paradise on Wings represented a Level 2 fair value measurement because it was based on quoted prices for identical or similar assets and liabilities in markets that are not active and other inputs that are observable or can be corroborated by observable market data. The fair value measurement of the contingent consideration represented a Level 3 fair value measurement because it was based on significant inputs not observed in the market. The Company’s other financial instruments consist of cash and cash equivalents, accounts receivable, notes receivable, accounts payable, accrued expenses and notes payable. The estimated fair values of the cash and cash equivalents, accounts receivable, approximates their respective carrying amounts due to the short-term maturities of these instruments. The estimated fair values of the notes receivable and notes payable also approximates their respective carrying amounts since their terms are similar to those in the lending market for comparable loans with comparable risks. None of these instruments are held for trading purposes. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Notes Receivable | Note 9. Notes Receivable Notes Receivable – Unrelated Parties In May and June 2013, the Company made loans to certain of its franchisees in the aggregate original principal amount of $40,507 to assist them with the payment of franchise fees owed to the Company and the payment of other business expenses incurred by the franchisees in running their respective restaurants. The loans are for terms ranging from one year to three years in duration, are payable in monthly installments, and do not require the payment of any interest. Payments in the aggregate amount of $2,512 and $2,652 were made against the loans during the years ended December 31, 2016 and 2015, respectively. A total of $2,512 of principal was outstanding under the loan at December 31, 2015. The loans were paid off in full during the year ended December 31, 2016. In September 2014, the Company made a loan to one of its franchisees in the aggregate original principal amount of $6,329 to assist it with the payment of franchise fees owed to the Company and the payment of other business expenses incurred by the franchisee in running its restaurant. The loan is for a term of three years, is payable in monthly installments, and does not require the payment of any interest. Payments in the aggregate amount of $2,109 and $1,934 were made against the loan during the years ended December 31, 2016 and 2015, respectively. A total of $1,783 and $3,892 of principal was outstanding under the loan at December 31, 2016 and 2015, respectively. In June 2016, the Company made a loan to one of its franchisees under a promissory note in the aggregate original principal amount of $25,000. In July 2016, the Company made an additional loan to the same franchisee under a line of credit agreement for an aggregate original principal amount of up to $28,020. In September 2016, the Company made an additional loan to the same franchisee under a second line of credit agreement for an aggregate original principal amount of up to $25,000. Each of the loans was made to assist the franchisee with the payment of franchise fees owed to the Company and the payment of other business expenses incurred by the franchisee in running its restaurant. The loan under the promissory note is for a term of two years, is payable in monthly installments beginning January 1, 2017, and accrues interest at a rate of 5% per annum beginning September 1, 2016. The loan under the $28,020 line of credit agreement is for a term of two years, is payable in monthly installments beginning January 1, 2017, and does not require the payment of any interest. The loan under the $25,000 line of credit agreement is for a term of two years, is payable in monthly installments beginning January 1, 2017 and accrues interest at a rate of 5% per annum beginning October 1, 2016. No payments of principal or interest were made against any of the loans during the year ended December 31, 2016. Interest in the amount of $838 accrued during the year ended December 31, 2016. A total of $78,020 of principal and $838 of accrued interest was outstanding under the loans at December 31, 2016. In September 2016, the Company made a loan to one of its franchisees in the aggregate original principal amount of $13,869 to assist it with the payment of business expenses incurred by the franchisee in running its restaurant. The loan is due and payable in full on November 15, 2018, is payable in monthly installments beginning December 15, 2016, and accrues interest at a rate of 5% per annum beginning October 1, 2016. Payments in the amount of $551 were made against the loan during the year ended December 31, 2016. Interest in the amount of $57 accrued and was paid in full during the year ended December 31, 2016. A total of $13,318 of principal was outstanding under the loan at December 31, 2016. No accrued but unpaid interest was outstanding under the loans at December 31, 2016. Notes Receivable – Related Parties In October 2014, the Company loaned $3,700 to Yobe Acquisition, LLC (“Yobe Acquisition”). The loan accrued interest at a rate of 6% per year and was payable on demand. No payments were made under the loan during the year ended December 28, 2014. The loan was paid off in full by Blue Victory during the Note 10. Debt Obligations During the year ended December 31, 2015, the Company loaned a total of $121,638 to Raceland QSR. The Company loaned an additional $419,849 to Raceland QSR during the year ended December 31, 2016. Raceland QSR repaid the entire outstanding balance of the loan during the year ended December 31, 2016 The carrying value of the Company’s outstanding notes receivable was $93,121 at December 31, 2016, all of which were due from unrelated third parties. The notes receivable are reflected in cash flows from operating activities because the loans were made to assist the respective franchisees with the payment of franchisee fees owed to the Company and/or business expenses incurred by the franchisee in running its restaurant. The carrying value of the Company’s outstanding notes receivable was $128,042 at December 31, 2015. A total of $6,404 of the notes receivable were due from unrelated third parties and are reflected in cash flows from operating activities because the loans were made to assist the respective franchisees with the payment of franchisee fees owed to the Company and/or business expenses incurred by the franchisee in running its restaurant. The remaining balance of $121,638 of the notes receivable were due from related parties and are reflected in cash flows from investing activities because the loans were not made in connection with the payment of franchise fees, royalties or other revenue owed to the Company. The Company had interest receivable of $838 and $13,552 outstanding at December 31, 2016 and 2015, respectively. The Company generated interest income of $896 and $6,316 for the years ended December 31, 2016 and 2015, respectively. During the year ended December 31, 2016, the Company recorded an allowance for uncollectible interest receivable of $13,552 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Note 10. Debt Obligations During the fourth quarter of 2008, the Company issued promissory notes to four investors for a total original principal amount of $11,000 in return for aggregate cash proceeds of $11,000. The notes bear interest at a rate of 6% per annum and provide for the payment of all principal and interest three years after the date of the respective notes. The notes provide for the payment of a penalty in an amount equal to 10% of the principal amount of the notes in the event they are not paid by the end of the term. In April 2015, the Company repaid notes to two of these investors representing a total original principal amount of $4,000. As a result, a total original principal balance of $7,000 was outstanding under the two remaining notes at December 31, 2016 and 2015. These notes are currently in default. On September 13, 2013, the Company entered into a loan agreement with Blue Victory, a related party, pursuant to which Blue Victory agreed to extend a revolving line of credit facility to the Company for up to $1 million. Under the terms of the loan agreement, Blue Victory agreed to make loans to the Company in such amounts as the Company may request from time to time, provided that the total amount of loans requested in any calendar month may not exceed $150,000. All loan requests are subject to approval by Blue Victory. The Company may use the proceeds from the credit facility for general working capital purposes. The credit facility is unsecured, accrues interest at a rate of 6% per annum, and will terminate upon the earlier to occur of the fifth anniversary of the loan agreement or the occurrence of an event of default. The outstanding principal balance of the credit facility and any accrued and unpaid interest thereon are payable in full on the termination date. Loans may be prepaid by the Company without penalty and borrowed again at any time prior to the termination date. The obligation of the Company to pay the outstanding balance of the credit facility is evidenced by a promissory note that was issued by the Company to Blue Victory on September 13, 2013. Blue Victory has the right, at any time on or after September 13, 2013, to convert all or any portion of the outstanding principal of the credit facility, together with accrued interest payable thereon, into shares of the Company’s common stock at a conversion rate equal to: (i) the closing price of the common stock on the date immediately preceding the conversion date if the common stock is then listed on the OTCQB or a national securities exchange, (ii) the average of the most recent bid and ask prices on the date immediately preceding the conversion date if the common stock is then listed on any of the tiers of the OTC Markets Group, Inc., or (iii) in all other cases, the fair market value of the common stock as determined by the Company and Blue Victory. Notwithstanding the above, in the event the Company does not have adequate shares of common stock authorized and available for issuance to be able to fulfill a conversion request, or the Company would breach its obligations under the rules or regulations of any trading market on which its shares of common stock are then listed if it fulfilled a conversion request, At December 28, 2014, the outstanding principal amount of the credit facility was $3,420. Between December 29, 2014 and December 31, 2015, the Company borrowed an additional $1,987,953 under the credit facility. During the year ended December 31, 2015, repayments of $1,991,373 were made by the Company. Accordingly, no principal was outstanding under the credit facility at December 31, 2015. During the year ended December 31, 2016, the Company borrowed an additional $840,353 under the credit facility, of which $824,250 was repaid by the Company during the year ended December 31, 2016. Accordingly, the amount of principal outstanding under the credit facility was $16,103 at December 31, 2016. On December 19, 2016, the Company acquired Seediv. In connection therewith, the Company assumed debt owed by Seediv to Blue Victory pursuant to the terms of a promissory note issued by Seediv in favor of Blue Victory in the amount of $216,469. The promissory note The carrying value of the Company’s outstanding promissory notes, net of unamortized discount, was $239,573 and $7,000 at December 31, 2016 and 2015, respectively, as follows: December 31, December 31, 2016 2015 Notes payable – related party $ 232,572 $ -0- Notes payable – in default 7,000 7,000 Total notes payable, net $ 239,572 $ 7,000 |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders Equity Note [Abstract] | |
Capital Stock | Note 11. Capital Stock The Company’s authorized capital consisted of 100,000,000 shares of Class A common stock, par value $0.01 per share, at December 31, 2016 and 2015, respectively, of which 6,647,464 and 6,521,035 shares of common stock were outstanding at December 31, 2016 and 2015, respectively. In January 2013, the Company appointed Richard W. Akam to serve as its Chief Operating Officer. In connection therewith, the Company entered into an employment agreement with Mr. Akam. The employment agreement provides in part that the Company will grant Mr. Akam shares of its common stock equal in value to $50,000 on January 1st of each year thereafter if Mr. Akam is continuously employed by the Company through January 1st of the applicable year. The number of shares of common stock that the Company will issue to Mr. Akam for each applicable year will be calculated based on the average of the last sales price of shares of the Company’s common stock as reported on the OTCQB for the month of January of the applicable year. Note 14. Commitments and Contingencies – Employment Agreements In January 2015, Mr. Akam 71,429 of common stock under the terms of his employment agreement with the Company. The shares were valued at a price per share equal to the closing price of the Company’s common stock on the OTCQB on the date the transactions were completed. The Company recognized $548 of stock compensation expense in connection therewith during the year ended December 31, 2015 . The Company also recognized $49,863 of stock compensation expense during the year ended December 31, 2015 in connection with the vesting of the shares of common stock to be earned to Mr. Akam on January 1, 2016 under the terms of his employment agreement with the Company. On February 27, 2014, the Company entered into a securities purchase agreement with Seenu G. Kasturi pursuant to which Mr. Kasturi agreed to purchase 206,061 shares of the Company’s common stock for $340,000. The price per share of common stock paid by Mr. Kasturi was equal to the closing price of the Company’s common stock on the OTCQB on the day immediately preceding the date the transaction was completed. Mr. Kasturi paid for the shares through the issuance of a promissory note in favor of the Company in the amount of $340,000. The promissory note was unsecured, accrued interest at a rate of 6% per annum, and had a maturity date of March 31, 2015. The principal and interest were payable in four equal quarterly installments of $85,000 beginning June 30, 2014. The promissory note was paid off in full by Mr. Kasturi during the year ended December 31, 2015. In January 2015, the Company issued 57,142 shares of its common stock to J. David Eberle pursuant to the terms of the settlement agreement and release that the Company entered into with him in connection with the settlement of the legal proceeding commenced by Mr. Eberle against the Company in April 2012. The shares were valued at a price per share equal to the closing price of the Company’s common stock on the OTCQB on the date of grant, which valued the shares at $17,143. The Company recorded a loss on settlement of litigation of $27,143, comprised of the $100,000 settlement amount plus the $17,143 value of the shares, less the $90,000 stock payable recorded before the settlement of the legal proceeding. A description of the legal proceeding and settlement and release agreement is set forth herein under Note 16. Judgments in Legal Proceedings In February 2015, the Company issued 10,000 shares of its common stock to one of its non-executive employees as incentive compensation. . In August 2015, the Company issued 20,000 shares of its common stock to one of its non-executive employees as incentive compensation. In January 2016, Mr. Akam 71,429 of common stock under the terms of his employment agreement with the Company. The shares were valued at a price per share equal to the closing price of the Company’s common stock on the OTCQB on the date the transactions were completed. The Company recognized $137 of stock compensation expense in connection therewith during the year ended December 31, 2016 . The Company also recognized $49,863 of stock compensation expense during the year ended December 31, 2016 in connection with the vesting of the shares of common stock to be earned to Mr. Akam on January 1, 2017 under the terms of his employment agreement with the Company. In August 2016, the Company issued 35,000 shares of its common stock to Guiseppe Cala (“Cala”) pursuant to the terms of a The shares were valued at a price per share equal to the closing price of the Company’s common stock on the OTCQB on the date of grant. A description of the settlement and release agreement is set forth herein under Note 16. Judgments in Legal Proceedings In November 2016, the Company issued 20,000 shares of its common stock to one of its non-executive employees as incentive compensation. The Company incurred a total of $91,200 and $59,012 for stock compensation expense during the years ended December 31, 2016 and 2015, respectively. |
Stock Options and Warrants
Stock Options and Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Stock Options and Warrants [Abstract] | |
Stock Options and Warrants | Note 12. Stock Options and Warrants The Company did not issue any stock options or warrants exercisable into shares of the Company’s common stock during the years ended December 31, 2016 and 2015, and no stock options or warrants were exercised or outstanding during the years ended December 31, 2016 and 2015. |
Stock Compensation Plans
Stock Compensation Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Plans | Note 13. Stock Compensation Plans American Restaurant Concepts, Inc. 2011 Stock Incentive Plan In August 2011, the Company adopted the American Restaurant Concepts, Inc. 2011 Stock Incentive Plan. Under the plan, 1,214,286 shares of common stock may be granted to employees, officers and directors of, and consultants and advisors to, the Company under awards that may be made in the form of stock options, warrants, stock appreciation rights, restricted stock, restricted units, unrestricted stock and other equity-based or equity-related awards. As of December 31, 2016, 142,858 shares of the Company’s common stock remained available for issuance under the plan. The plan terminates in August 2021. On August 18, 2011, the Company filed a registration statement on Form S-8, File No. 333- 176383 ARC Group, Inc. 2014 Stock Incentive Plan In June 2014, the Company adopted the ARC Group, Inc. 2014 Stock Incentive Plan. Under the plan, 1,000,000 shares of common stock may be granted to employees, officers and directors of, and consultants and advisors to, the Company under awards that may be made in the form of stock options, warrants, stock appreciation rights, restricted stock, restricted units, unrestricted stock and other equity-based or equity-related awards. As of December 31, 2016, all 1,000,000 shares of the Company’s common stock remained available for issuance under the plan. The plan terminates in June 2024. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Employment Agreements and Arrangements Richard W. Akam On January 22, 2013, the Company appointed Richard W. Akam to serve as its Chief Operating Officer. In connection therewith, the Company entered into an employment agreement with Mr. Akam pursuant to which it agreed to pay him an annual base salary of $150,000, subject to annual adjustment and discretionary bonuses, plus certain standard and customary fringe benefits. The initial term of the employment agreement is for one year and automatically renews for additional one year terms until terminated by Mr. Akam or the Company. The employment agreement provides that, on July 22, 2013, the Company would grant Mr. Akam shares of its common stock equal in value to $50,000 if Mr. Akam is continuously employed by the Company through that date. The number of shares of common stock that the Company would issue to Mr. Akam would be calculated based on the last sales price of the Company’s common stock as reported on the OTCQB on July 22, 2013. The employment agreement also provides that the Company will grant Mr. Akam additional shares of its common stock equal in value to $50,000 on January 1st of each year thereafter if Mr. Akam is continuously employed by the Company through January 1st of the applicable year. The number of shares of common stock that the Company will issue to Mr. Akam for each applicable year will be calculated based on the average of the last sales price of shares of the Company’s common stock as reported on the OTCQB for the month of January of the applicable year. Notwithstanding the above, and in connection therewith, Mr. Akam agreed that the number of shares that may be earned by him under his employment agreement in connection with any particular grant would be equal to the lesser of: (i) 71,429 shares of common stock, or (ii) the number of shares of common stock calculated by dividing $50,000 by the closing price of the Company’s common stock on the day immediately preceding the date the Company’s obligation to issue the shares to him fully accrues. Mr. Akam also agreed that in the event the Company is unable to fulfill its obligation to issue all of the shares earned by him with respect to any particular grant because it does not have enough shares of common stock authorized and available for issuance, (i) Mr. Akam will not require the Company to issue more shares of common stock than are then authorized and available for issuance by the Company, and (i) the Company may settle any liability to Mr. Akam created as a result thereof in cash. In the event the Company terminates Mr. Akam’s employment without “cause” (as such term is defined in the employment agreement), Mr. Akam will be entitled to receive the following severance compensation from the Company: (i) if the Company terminates Mr. Akam’s employment during the first year of his employment with the Company, that amount of compensation equal to the salary payable to Mr. Akam during that year, (ii) if the Company terminates Mr. Akam’s employment during the second year of his employment with the Company, that amount of compensation equal to nine months of the salary payable to Mr. Akam during that year, (iii) if the Company terminates Mr. Akam’s employment during the third year of his employment with the Company, that amount of compensation equal to six months of the salary payable to Mr. Akam during that year, and (iv) if the Company terminates Mr. Akam’s employment after the third year of his employment with the Company, that amount of compensation equal to three months of the salary payable to Mr. Akam during the year that such termination occurs. Mr. Akam will not be entitled to receive any severance compensation from the Company if the Company terminates his employment for “cause” or as a result of his disability, or if Mr. Akam resigns from his employment with the Company. The employment agreement also contains customary provisions that provide that, during the term of Mr. Akam’s employment with the Company and for a period of one year thereafter, Mr. Akam is prohibited from disclosing confidential information of the Company, soliciting Company employees and certain other persons, and competing with the Company. On July 31, 2013, the Company appointed Richard Akam as its Chief Executive Officer, Chief Financial Officer and Secretary. The Company and Mr. Akam did not amend the employment agreement in connection with the above appointments, and Mr. Akam did not receive any additional compensation in connection with the above appointments. On August 19, 2013, the Company appointed Daniel Slone as the Company’s Chief Financial Officer. In connection therewith, Richard Akam resigned as the Company’s Chief Financial Officer on August 19, 2013. Mr. Akam retained his positions as the Company’s Chief Executive Officer, Chief Operating Officer and Secretary. On January 1, 2016 and 2015, Richard Akam earned 71,429 shares of common stock under the terms of his employment agreement with the Company. Daniel Slone On August 19, 2013, the Company appointed Daniel Slone as the Company’s Chief Financial Officer. The Company agreed to pay Mr. Slone an annual base salary of $1.00 in connection with his appointment. The Company did not enter into an employment agreement with Mr. Slone. Operating Leases Corporate Headquarters In January 2013, In January 2015, the Company entered into a lease with Crescent Hill Office Park for its corporate headquarters located at 6327-4 Argyle Forest Boulevard, Jacksonville, Florida pursuant to which the Company leases approximately Nocatee Restaurant In October 2013, the Nocatee Restaurant Youngerman Circle Restaurant Youngerman Circle Restaurant In May 2014, the Youngerman Circle Restaurant the Youngerman Circle Restaurant On December 20, 2016, Seediv entered into a new triple net lease with Raceland QSR for the Youngerman Circle Restaurant. The lease provides for rent payments to be made by the Company for each of 13 rent periods per year, with each rent period comprised of four weeks. The lease provides for an initial base rent payment equal to the greater of: (i) $10,000 per rent period, or (ii) 7.5% of the Youngerman Circle Restaurant’s net sales for the applicable rent period. Commencing on the fifth (5 th Rent expense was comprised of the following during the years ended December 31, 2016 and 2015, respectively: December 31, December 31, Straight-lined minimum rent $ 29,554 $ 21,039 Contingent rent -0- -0- Other -0- -0- Total $ 29,554 $ 21,039 Future minimum annual payments under the leases as of December 31, 2016 are as follows: Year Lease 2017 $ 35,269 2018 2,200 2019 -0- 2020 -0- 2021 -0- Thereafter -0- Total $ 37,469 |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Note 15. Related-Party Transactions Employment Agreements In January 2013, the Company entered into an employment agreement with Richard W. Akam in connection with his appointment as the Company’s Chief Operating Officer. Mr. Akam currently serves as the Company’s Chief Executive Officer, Chief Operating Officer and Secretary. A description of the employment agreement is set forth herein under Note 14. Commitments and Contingencies – Employment Agreements In January 2017, the Company appointed Seenu G. Kasturi as its President, Chief Financial Officer and Chairman of the board of directors and, in connection therewith, entered into an employment agreement with Mr. Kasturi. A description of the employment agreement is set forth herein under Note 17. Subsequent Events Sponsorship Agreements In July 2013, the Company entered into a three-year sponsorship agreement with the Jacksonville Jaguars, LLC and, in connection therewith, in August 2013, entered into a subcontractor concession agreement with Levy Premium Foodservice Limited Partnership (“Levy”) for a concession stand to be located at EverBank Field in Jacksonville, Florida. The Company concurrently assigned all of its rights and obligations under the concession agreement to DWG Acquisitions in return for a fee of $2,000 per month for each full or partial month during which the concession agreement is in effect. In July 2015, the Company extended its sponsorship agreement with the Jaguars by an additional two years and entered into a subcontractor concession agreement with Ovations Food Services, L.P. (“Ovations”) for a second concession stand at EverBank Field. The Company concurrently assigned all of its rights and obligations under the second concession agreement to DWG Acquisitions in return for an additional fee of $3,000 per month for each full or partial month during which the concession agreement is in effect. In September 2016, the Company terminated its subcontractor concession agreements with Levy and Ovations and the related assignment agreements with DWG Acquisitions, and entered into a sub-concession agreement with Jacksonville Sportservice, Inc. (“Jacksonville Sportservice”) and DWG Acquisitions with respect to the two concession stands previously covered by the Levy and Ovations subcontractor concession agreements. The Company concurrently assigned all of its rights and obligations under the sub-concession agreement to DWG Acquisitions in return for a fee equal to the income generated by the concession stands less all expenses incurred by the concession stands for each full or partial month during which the concession agreement is in effect. Seenu G. Kasturi owned approximately 14.8% of the Company’s common stock and all of the outstanding membership interests in DWG Acquisitions at December 31, 2016. He also served as the President, Treasurer and Secretary of DWG Acquisitions during the years ended December 31, 2016 and 2015 . Financing Transactions In September 2013, Fred Alexander served as a member of the Company’s board of directors and as an executive officer of Blue Victory during the years ended December 31, 2016 and 2015. The Company borrowed $840,353 and $1,987,953 from Blue Victory and repaid $824,250 and $1,991,373 to Blue Victory during the years ended December 31, 2016 and 2015, respectively. The Company had total principal in the amount of $16,103 outstanding under the credit facility The Company did not have any principal outstanding under the credit facility at December 31, 2015. A description of the credit facility is set forth herein under Note 10. Debt Obligations In February 2014, the Company entered into a securities purchase agreement with Seenu G. Kasturi pursuant to which Mr. Kasturi agreed to purchase 206,061 shares of the Company’s common stock for $340,000. Mr. Kasturi owned approximately 14.8% of the Company’s common stock and 90% of the equity interests in Blue Victory at December 31, 2016. He also served as the President, Treasurer and Secretary, and as the sole member of the board of directors, of Blue Victory during the years ended December 31, 2016 and 2015. A description of the transaction is set forth herein under Note 11. Capital Stock Leases In May 2014, the Youngerman Circle Restaurant President, Treasurer and Secretary of DWG Acquisitions and Raceland QSR during the years ended December 31, 2016 and 2015. A description of the leases is set forth herein under Note 14. Commitments and Contingencies Franchise Agreements In October 2013, DWG Acquisitions became the franchisee of the Dick’s Wings restaurant located in the Nocatee development in Ponte Vedra, Florida. . The Company generated $74,726 and $69,545 in royalties from DWG Acquisitions under the agreement . In May 2014, DWG Acquisitions became the franchisee of the Dick’s Wings restaurant located on Youngerman Circle in Argyle Village in Jacksonville, Florida. The Company generated $90,467 and $98,802 in royalties from DWG Acquisitions under the agreement . In December 2014, DWG Acquisitions became the franchisee of the Dick’s Wings restaurant located on Gornto Road in Valdosta, Georgia. . The Company generated $46,535 and $58,180 in royalties from DWG Acquisitions under the agreement . In March 2015, DWG Acquisitions became the franchisee of the Dick’s Wings restaurant located in Tifton, Georgia. . The Company generated $35,070 and $44,901 in royalties from DWG Acquisitions under the agreement fees from DWG Acquisitions under the agreement . In June 2015, DWG Acquisitions became the franchisee of the Dick’s Wings restaurant located in Fleming Island, Florida. . The Company generated $44,986 and $32,819 in royalties from DWG Acquisitions under the agreement fees from DWG Acquisitions under the agreement . In September 2015, DWG Acquisitions became the franchisee of the Dick’s Wings restaurant located in Panama City Beach, Florida. . The Company generated $52,564 and $16,372 in royalties from DWG Acquisitions under the agreement fees from DWG Acquisitions under the agreement . In March 2016, DWG Acquisitions became the franchisee of the Dick’s Wings restaurant located in Pensacola, Florida. . The Company generated $29,789 in royalties and $30,000 in franchise fees from DWG Acquisitions under the agreement during the year ended December 31, 2016. In March 2016, DWG Acquisitions became the franchisee of the Dick’s Wings restaurant located in Kingsland, Georgia. . The Company generated $44,659 in royalties and $30,000 in franchise fees from DWG Acquisitions under the agreement during the year ended December 31, 2016. During the years ended December 31, 2016 and 2015, the Company generated a total of $478,796 and $428,700 in royalties and franchise fees through its franchise agreements with DWG Acquisitions. Loans In October 2014, the Company loaned $3,700 to Yobe Acquisition. The loan was paid off in full by Blue Victory during the . A description of the loan is set forth herein under Note 9. Notes Receivable During the year ended December 31, 2015, the Company loaned a total of $121,638 to Raceland QSR. The Company loaned an additional $419,849 to Raceland QSR during the year ended December 31, 2016. The loan was paid off in full by Raceland QSR during the year ended December 31, 2016 of the loan is set forth herein under Note 9. Notes Receivable Acquisition of Seediv On December 19, 2016, the Company acquired all of the outstanding membership interests of Seediv from Seenu G. Kasturi. In connection therewith, the Company assumed debt owed by Seediv to Blue Victory pursuant to the terms of a promissory note issued by Seediv in favor of Blue Victory in the amount of $216,469. . Note 5. Acquisition of Seediv A description of the promissory note is set forth herein under Note 10. Debt Obligations. |
Judgments in Legal Proceedings
Judgments in Legal Proceedings | 12 Months Ended |
Dec. 31, 2016 | |
Judgment In Legal Proceedings [Abstract] | |
Judgments in Legal Proceedings | Note 16. Judgments in Legal Proceedings In October 2009, the Company initiated a legal proceeding entitled American Restaurant Concepts, Inc. vs. Cala, et al Cala v. Rosenberger et al. In August 2016, the Company entered into a full and final settlement and release agreement with Cala. Under the terms of the agreement, the Company and Cala agreed to release each other from all claims related to the ARC & Cala Proceedings, any and all other lawsuits that may have been filed by one party against the other, the 2010 Settlement Agreement, and any other matters, causes of action or claims either party may have had against the other. In consideration for the releases, the Company agreed to pay $15,000 to Cala and issue 35,000 shares of its common stock to Cala. The Company recognized a non-cash gain on settlement of liabilities of $175,449 in connection therewith during the year ended December 31, 2016. The remaining balance of $210,000 outstanding under the 2010 Settlement Agreement was debited to settlement agreements payable. On February 25, 2011, a legal proceeding entitled Duval Station Investment, LLC vs. Hot Wing Concepts, Inc. d/b/a Dick’s Wings and Grill, and American Restaurant Concepts, Inc. In April 2012, a legal proceeding entitled J. David Eberle vs. American Restaurant Concepts, Inc. any and all claims that were asserted or that could have been asserted by in the legal proceeding, and the complaint was dismissed with prejudice. The Company recognized a loss on the settlement of litigation of $27,142 during the year ended December 31, 2015 in connection therewith. In January 2015, Santander Bank filed a complaint against the Company in the Circuit Court, Fourth Judicial Circuit in and for Duval County, Florida, seeking damages of $194,181 plus interest, costs and attorney’s fees for breach of a guaranty of certain obligations of Ritz Aviation, LLC (“Ritz Aviation”) under a promissory note executed by Ritz Aviation in July 2005. During 2016, Santander Bank informed the Company that certain assets of Ritz Aviation had been sold for $82,642 and that the proceeds from the sale were applied towards the balance of the damages being sought, resulting in an outstanding balance of damages sought of $111,539. As a result, the Company recognized a gain on settlement of litigation of $82,642 during the year ended December 31, 2016. A total of $25,980 of accrued interest and $10,586 of other expenses were outstanding as of December 31, 2016, resulting in an aggregate potential loss of $148,105 as of December 31, 2016. The potential losses of $148,105 and $194,181 were reflected in accrued legal settlement at December 31, 2016 and 2015, respectively. This case is currently pending. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17. Subsequent Events On January 18, 2017, the Company appointed Seenu G. Kasturi as its President, Chief Financial Officer and Chairman of the board of directors. In connection therewith, on January 17, 2017, Daniel Slone resigned as the Company’s Chief Financial Officer. On January 18, 2017, the Company entered into an employment agreement with Mr. Kasturi to serve as the President and Chief Financial Officer of the Company. The employment agreement is for an initial term of three years with automatic one-year renewals thereafter unless earlier terminated or not renewed as provided therein. Under the terms of the employment agreement, Mr. Kasturi will be paid annual compensation in the amount of $80,000 per year, consisting of: (i) an initial annual base salary of $26,000, and (ii) equity awards equal in value to $54,000 per year. Mr. Kasturi will be eligible to receive increases in salary on January 1 st On January 31, 2017, the Company and Richard W. Akam entered into an amendment to the employment agreement, dated January 22, 2013, by and between the Company and Mr. Akam. Under the terms of the amendment, the parties confirmed the appointment of Mr. Akam as the Company’s Chief Operating Officer on January 22, 2013 and as the Company’s Chief Executive Officer on July 31, 2013, clarified that Mr. Akam’s monthly base salary after the initial term of the employment agreement may be adjusted from time to time by the Company with Mr. Akam’s consent, removed the provision relating to the grant of shares of the Company’s common stock to Mr. Akam on January 1 st st On March 24, 2017, the Company and Blue Victory entered into an amendment to the loan agreement, dated September 13, 2013, pursuant to which Blue Victory had extended a line of credit facility to the Company for up to $1 million. Under the terms of the amendment, the Company and Blue Victory agreed to reduce the maximum amount of funds available under the credit facility from $1 million to $50,000. Pursuant to the terms of the amendment, the promissory note that was issued by the Company to Blue Victory on September 13, 2013 to evidence the obligation of the Company to pay the outstanding balance of the credit facility, was terminated in its entirety. The obligation of the Company to pay any future outstanding balance of the credit facility was evidenced by a new promissory note that was issued by the Company to Blue Victory on March 24, 2017. On April 1, 2017, the Company issued 10,537 shares of its common stock to Seenu G. Kasturi pursuant to the terms of his employment agreement with the Company. There have been no other significant subsequent events through the date these financial statements were issued. |
Significant Accounting Polici24
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. All intercompany accounts and transactions were eliminated in consolidation. |
Going Concern | Going Concern As shown in the accompanying financial statements, the Company incurred net losses of $863,576 and $432,730 for the years ended December 31, 2016 and 2015, respectively, and experienced negative cash flows from operations for each of those years. The Company also had an accumulated deficit of $5,163,195 and a working capital deficit of $1,259,231 at December 31, 2016. Those facts create an uncertainty about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its successfully executing its plans to generate positive cash flows during its 2017 fiscal year. The Company’s financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern. |
Estimates | Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain amounts in the Company’s financial statements for the 2015 fiscal year have been reclassified to conform to the 2016 fiscal year presentation. These reclassifications did not result in any change to the previously reported total assets, net loss or stockholders’ deficit. |
Segment Disclosure | Segment Disclosure The Company has a single brand, all of the restaurants of which operate in the full-service casual dining industry in the United States. Pursuant to the standards of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting |
Franchise Operations | Franchise Operations The Company enters into franchise agreements with each of its franchisees to build and operate restaurants using the Dicks Wings brand within a defined geographic area. The agreements have a 10-year term and can be renewed for one additional 10-year term. The Company provides the use of its Dick’s Wings trademarks and Dick’s Wings system, which includes uniform operating procedures, standards for consistency and quality of products, technical knowledge, and procedures for accounting, inventory control and management, in return for the . Franchisees are required to operate their restaurants in compliance with their franchise agreements, which includes adherence to operating and quality control procedures established by the Company. The Company is not required to provide loans, leases, or guarantees to franchisees or the franchisees’ employees and vendors. If a franchisee becomes financially distressed, the Company is not required to provide financial assistance. If financial distress leads to insolvency of the franchisee or the filing of a petition by or against the franchisee under bankruptcy laws, the Company has the right, but not the obligation, to acquire the franchise at fair value as determined by an independent appraiser selected by the Company. Franchisees generally remit royalty payments weekly for the prior week’s sales. Franchise and area development fees are paid upon the signing of the related franchise agreements. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less on the date of purchase to be cash equivalents in accordance with ASC Topic 305, Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded in accordance with ASC Topic 310, Receivables The accounts receivable balance at December 31, 2016 was comprised primarily of credit card sales by Company-owned restaurants and unpaid royalties due from one of the Company’s franchisees that was behind in its payments, all of which the Company collected in full in early 2017. Accordingly, the allowance for doubtful accounts was zero at December 31, 2016. The accounts receivable balance at December 31, 2015 was comprised primarily of unpaid royalties, franchisee fees and licensing fees due from one of the Company’s franchisees that was behind in its payments, all of which the Company collected in full during the year ended December 31, 2016. Accordingly, the allowance for doubtful accounts was zero at December 31, 2015. |
Inventory | Inventory Inventory consists primarily of food and beverage products and is accounted for at the lower of cost or market using the first in, first out method of inventory valuation in accordance with ASC Topic 330, Inventory |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost, less accumulated depreciation and amortization, in accordance with ASC Topic 360, Property, Plant and Equipment Leasehold improvements, which include the cost of improvements funded by landlord incentives or allowances, are amortized using the straight-line method over the lesser of the term of the lease, with consideration of renewal options if renewals are reasonably assured because failure to renew would result in an economic penalty, or the estimated useful lives of the assets. Furniture and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. The Company reviews property and equipment for impairment at least quarterly and whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable in accordance with ASC 360. Recoverability is measured by comparison of the carrying amount of the assets to the future undiscounted net cash flows that the assets are expected to generate. If the assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
Long-Lived Assets | Long-Lived Assets The Company reviews long-lived assets for impairment at least quarterly or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable in accordance with ASC 360. Assets are reviewed at the lowest level for which cash flows can be identified, which is at the individual restaurant level. The Company evaluates the recoverability of a restaurant’s long-lived assets, including buildings, intangibles, leasehold improvements, furniture, fixtures, and equipment over the remaining life of the primary asset in the asset group, after considering the potential impact of planned operational improvements, marketing programs, and anticipated changes in the trade area. In determining future cash flows, significant estimates are made by management with respect to future operating results for each restaurant over the remaining life of the primary asset in the asset group. If assets are determined to be impaired, the impairment charge is measured by calculating the amount by which the asset carrying amount exceeds its fair value based on the Company’s estimate of discounted future cash flows. The Company accounts for exit or disposal activities, including restaurant closures, in accordance with ASC Topic 420, Exit or Disposal Cost Obligations |
Financial Instruments | Financial Instruments The Company accounts for its financial instruments in accordance with ASC Topic 825, Financial Instruments |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the Company’s principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. In accordance with ASC Topic 820, Fair Value Measurements and Disclosures The levels of fair value hierarchy are: Level 1: Quoted prices in active markets for identical assets and liabilities at the measurement date; Level 2: Observable inputs other than quoted prices included in Level 1, such as: (i) quoted prices for similar assets and liabilities in active markets, (ii) quoted prices for identical or similar assets and liabilities in markets that are not active, and (iii) other inputs that are observable or can be corroborated by observable market data; and Level 3: Unobservable inputs for which there is little or no market data available. A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. In contrast, the Company considers unobservable data to be data that reflects the Company’s assumptions of what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. |
Investment in Paradise on Wings | Investment in Paradise on Wings On January 20, 2014, the Company purchased a 50% ownership interest in Paradise on Wings Franchise Group, LLC, a Utah limited liability company that is the franchisor of the Wing Nutz ® Note 4. Investment in Paradise on Wings The Company accounted for its investment in Paradise on Wings under the equity method of accounting in accordance with ASC Topic 323, Investments – Equity Method and Joint Ventures The Company reviews its investment in Paradise on Wings for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable in accordance with ASC 323. The standard for determining whether an impairment must be recorded under ASC 323 is whether an “other-than-temporary” decline in value of the investment has occurred. The evaluation and measurement of impairments under ASC 323 involves quantitative and qualitative factors and circumstances surrounding the investment, such as recurring operating losses, credit defaults and subsequent rounds of financing. If an unrealized loss on the investment is considered to be other-than-temporary, the loss is recognized in the period the determination is made and the value of the investment is reduced by the amount of the loss. |
Acquisition of Seediv | Acquisition of Seediv On December 19, 2016, the Company acquired all of the issued and outstanding membership interests of Seediv. A description of the Company’s acquisition of Seediv is set forth herein under Note 5. Acquisition of Seediv. The Company determined that the acquisition of Seediv constituted a business combination as defined by ASC Topic 805, Business Combinations Note 5. Acquisition of Seediv Fair Value Measurements and Disclosures |
General Advertising Fund | General Advertising Fund The Company has established a general advertising fund that it uses to pay for advertising costs, sales promotions, market research and other support functions intended to maximize general public recognition and acceptance of the Dick’s Wings brand. Company-owned and franchised restaurants are required to contribute at least 1%, but not more than 2%, of their gross revenue to the Company’s general advertising fund. Contributions made by franchisees to the general advertising fund and marketing and advertising expenses paid by the general advertising fund are not recognized as revenues and expenses. They instead constitute agency transactions. These contributions are recorded as a liability against which specific costs are charged. |
Revenue Recognition | Revenue Recognition The Company’s revenue consists primarily of proceeds from the sale of food and beverage products at its Company-owned restaurants, and royalty payments, franchise fees and area development fees that it receives from its franchisees. Revenue Recognition The Company records revenue from the sale of food and beverages as products are sold. Royalties are accrued as earned and are calculated each period based on restaurant sales. Franchise fees from individual franchise sales is recognized upon the opening of the franchised restaurant when all material obligations and initial services to be provided by the Company have been performed. Area development fees are dependent upon the number of restaurants in the territory, as are the Company’s obligations under the area development agreement. Consequently, as obligations are met, area development fees are recognized proportionally with expenses incurred with the opening of each new restaurant and any royalty-free periods. The Company records gift cards under a Dick’s Wings system-wide program. Gift cards sold are recorded as a gift card liability. When redeemed, the gift card liability account is offset by recording the transaction as revenue. Breakage income represents the value associated with the portion of gift cards sold that will most likely never be redeemed. Based on the Company’s historical gift card redemption patterns and the fact that the Company’s gift cards have no expiration dates or dormancy fees, the Company can reasonably estimate the amount of gift card balances for which redemption is remote and record breakage income based on this estimate. The Company updates its estimate of the breakage rate periodically and, if necessary, adjusts the gift card liability balance accordingly. The Company had gift card liability of $5,096 and $3,396 at December 31, 2016 and 2015, respectively. These amounts were included in other current liabilities in the Company’s Consolidated Balance Sheet. |
Payments Received From Vendors | Payments Received From Vendors Vendor allowances include allowances and other funds that the Company receives from vendors. Certain of these funds are determined based on various quantitative contract terms. The Company also receives vendor allowances from certain manufacturers and distributors calculated based upon purchases made by franchisees. Vendor allowances reduction in costs. The Company generally receives payment from vendors approximately 30 days from the end of a month for that month’s purchases. The Company received vendor allowances of $78,023 and $33,325 during the years ended December 31, 2016 and 2015, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for employee stock-based compensation in accordance with the fair value recognition provisions of ASC Topic 718, Compensation – Stock Compensation The Company accounts for non-employee stock-based compensation in accordance with ASC 718 and ASC Topic 505, Equity The Company uses the Black-Scholes pricing model to determine the fair value of the stock-based compensation that it grants to employees and non-employees. The Black-Scholes pricing model takes into consideration such factors as the estimated term of the securities, the conversion or exercise price of the securities, the volatility of the price of the Company’s common stock, interest rates, and the probability that the securities will be converted or exercised to determine the fair value of the securities. The selection of these criteria requires management’s judgment and may impact the Company’s net income or loss. The computation of volatility is intended to produce a volatility value that is representative of the Company’s expectations about the future volatility of the price of its common stock over an expected term. The Company used its share price history to determine volatility and cannot predict what the price of its shares of common stock will be in the future. As a result, the volatility value that the Company calculated may differ from the actual volatility of the price of its shares of common stock in the future. The Company recognized stock compensation expense of $91,200 and $59,012 during the years ended December 31, 2016 and 2015, respectively. |
Operating Leases | Operating Leases Rent expense for leases that contain scheduled rent increases is recognized on a straight-line basis over the lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty such that the renewal appears reasonably assured. The straight-line rent calculation and rent expense includes the rent holiday period, which is the period of time between taking control of a leased site and the rent commencement date. The amount by which straight-line rent exceeds actual lease payment requirements in the early years of the lease is accrued as deferred rent liability and reduced in later years when the actual cash payment requirements exceed the straight-line expense. Contingent rents are generally amounts due as a result of sales in excess of amounts stipulated in certain restaurant leases and are included in rent expense as they are incurred. Landlord contributions are recorded when received as a deferred rent liability and amortized as a reduction of rent expense on a straight-line basis over the lease term. |
Marketing and Advertising | Marketing and Advertising Contributions to the national advertising fund related to Company-owned restaurants are expensed as contributed and local advertising costs for Company-owned restaurants are expensed as incurred. |
Start-Up Costs | Start-Up Costs Start-up costs consists of costs associated with the opening of new Company-owned restaurants and varies based on the number of new locations opening and under construction. These costs are expensed as incurred in accordance with ASC Topic 720, Other Expenses |
Sales Taxes | Sales Taxes Sales taxes collected from customers are excluded from revenue. Sales taxes payable are included in accrued expenses until the taxes are remitted to the appropriate taxing authorities in accordance with ASC 450, Contingencies |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes Net deferred tax assets were comprised of the following at December 31, 2016 and 2015, respectively: December 31, December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 965,216 $ 908,297 Deferred tax liabilities — — Valuation allowance (965,216 ) (908,297 ) Net deferred tax asset $ — $ — The Company had net operating loss carry-forwards of approximately $2,533,376 and $2,383,982 at December 31, 2016 and 2015, respectively, that may be offset against future taxable income. No tax benefit has been reported in the financial statements for the Company’s 2016 and 2015 fiscal years because the potential tax benefit is offset by a valuation allowance of the same amount. The Company had no uncertain tax positions at December 31, 2016 and 2015. Utilization of net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations contained in the Internal Revenue Code of 1986, as amended, as well as similar state and foreign provisions. These ownership changes may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income and tax, respectively. On November 2, 2012, William D. Leopold purchased 2,218,572 shares of the Company’s common stock, which represented approximately 41.2% of the outstanding shares of the Company’s common stock on that date, from Michael Rosenberger, who was then serving as the Company’s Chief Executive Officer, Chief Financial Officer, Secretary and sole member of the Company’s board of directors. This transaction could be deemed to have resulted in a change in ownership of the Company. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue With Contracts From Customers In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern In February 2015, the FASB issued ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory In February 2016, the FASB issued ASU 2016-02, Leases on its financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Payments The Company reviewed all other significant newly-issued accounting pronouncements and concluded that they either are not applicable to the Company’s operations or that no material effect is expected on the Company’s financial statements as a result of future adoption. |
Significant Accounting Polici25
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of net deferred tax assets | December 31, December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 965,216 $ 908,297 Deferred tax liabilities — — Valuation allowance (965,216 ) (908,297 ) Net deferred tax asset $ — $ — |
Investment in Paradise on Win26
Investment in Paradise on Wings (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of summary of the unaudited income statement of Paradise on Wings | Statement of Operations Year Year Revenue $ 384,653 $ 348,781 Operating expenses (830,023 ) (585,384 ) Loss from operations (445,370 ) (236,603 ) Other expense — (258,832 ) Net loss $ (445,370 ) $ (495,435 ) Company’s share of net loss $ (222,685 ) $ (247,717 ) |
Schedule of summary of the unaudited balance sheet of Paradise on Wings | Balance Sheet December 31, December 31, Current assets $ 3,549 $ 62,460 Equity investment 141,168 141,168 Total assets $ 144,717 $ 203,628 Total liabilities $ 110,596 $ 101,023 Equity 34,121 102,605 Total liabilities and equity $ 144,717 $ 203,628 |
Acquisition of Seediv (Tables)
Acquisition of Seediv (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed based on their fair values at the time of the acquisition | Cash and cash equivalents $ 18,089 Inventory 40,574 Other current assets 6,538 Leasehold improvements, net 46,541 Furniture and equipment, net 33,701 Total assets acquired 145,443 Accounts payable – related party (1,026 ) Accrued expenses (126,878 ) Notes payable – related party (234,286 ) Total liabilities assumed (362,190 ) Seediv compensation expense 251,309 Net consideration paid $ 34,562 |
Schedule of certain unaudited pro forma financial information | Year Year Revenue $ 4,643,904 $ 4,316,518 Loss from continuing operations (895,371 ) (107,918 ) Net loss (1,516,949 ) (587,094 ) Net loss per share – basic and fully diluted $ (0.23 ) $ (0.09 ) |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | December 31, December 31, Food $ 25,942 $ -0- Beverages 19,308 -0- Total $ 45,250 $ -0- |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | December 31, December 31, Leasehold improvements $ 62,125 $ -0- Furniture, fixtures and equipment 50,140 -0- Subtotal 112,265 -0- Less: accumulated depreciation (31,317 ) -0- Total $ 80,948 $ -0- |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of equity investment in Paradise on Wings within the fair value hierarchy utilized to measure fair value on a recurring basis | Level 1 Level 2 Level 3 Equity investment in Paradise on Wings: December 31, 2016 $ -0- $ -0- $ -0- December 31, 2015 $ -0- $ 570,828 $ -0- Contingent consideration: December 31, 2016 $ -0- $ -0- $ 20,897 December 31, 2015 $ -0- $ -0- $ -0- |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding promissory notes, net of unamortized discount | December 31, December 31, 2016 2015 Notes payable – related party $ 232,572 $ -0- Notes payable – in default 7,000 7,000 Total notes payable, net $ 239,572 $ 7,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Rent Expense | December 31, December 31, Straight-lined minimum rent $ 29,554 $ 21,039 Contingent rent -0- -0- Other -0- -0- Total $ 29,554 $ 21,039 |
Schedule of future minimum annual payments | Year Lease 2017 $ 35,269 2018 2,200 2019 -0- 2020 -0- 2021 -0- Thereafter -0- Total $ 37,469 |
Description of Business (Detail
Description of Business (Detail Textuals) | Dec. 31, 2016RestaurantConcession_stands |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 23 |
Florida | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 18 |
Georgia | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 5 |
Franchised Units | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 21 |
Franchised Units | Florida | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | Concession_stands | 2 |
Entity Operated Units | |
Franchiser Disclosure [Line Items] | |
Number of restaurants | 2 |
Description of Business (Deta34
Description of Business (Detail Textuals 1) | 1 Months Ended |
Dec. 19, 2016USD ($) | |
Acquisition of Seediv | |
Business Acquisition [Line Items] | |
Payment agreed for membership interests | $ 600,000 |
Significant Accounting Polici35
Significant Accounting Policies - Summary of net deferred tax assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 965,216 | $ 908,297 |
Deferred tax liabilities | ||
Valuation allowance | (965,216) | (908,297) |
Net deferred tax asset |
Significant Accounting Polici36
Significant Accounting Policies (Detail Textuals) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Net losses | $ (863,576) | $ (432,730) |
Accumulated deficit | (5,163,195) | (4,299,619) |
Working capital deficit | $ 1,259,231 | |
Term of franchise agreement | 10 years | |
Renewal of additional term of franchise agreement | 10 years | |
Compensation expense acquisition of Seediv | $ 251,309 | |
Method used for fair value estimation of options | Black-Scholes pricing model | |
Stock compensation expense | $ 91,200 | 59,012 |
Marketing and advertising expenses | 46,545 | 85,498 |
Net operating loss carry forwards | $ 2,533,376 | $ 2,383,982 |
Significant Accounting Polici37
Significant Accounting Policies (Detail Textuals 1) - USD ($) | Nov. 02, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 20, 2014 |
Accounting Policies [Line Items] | ||||
Advertising fund liabilities | $ 5,096 | $ 3,396 | ||
Allowances from vendor | $ 78,023 | $ 33,325 | ||
Common stock issued for settlement of litigation (in shares) | ||||
Minimum | ||||
Accounting Policies [Line Items] | ||||
Percentage required to contribute by company-owned and franchised restaurants | 1.00% | |||
Maximum | ||||
Accounting Policies [Line Items] | ||||
Percentage required to contribute by company-owned and franchised restaurants | 2.00% | |||
Paradise on Wings Franchise Group, LLC | ||||
Accounting Policies [Line Items] | ||||
Percentage of ownership interest | 50.00% | 50.00% | ||
William D Leopold | ||||
Accounting Policies [Line Items] | ||||
Common stock issued for settlement of litigation (in shares) | 2,218,572 | |||
Percentage of common stock outstanding shares | 41.20% |
Investment in Paradise on Win38
Investment in Paradise on Wings - Summary of the unaudited income statement of Paradise on Wings (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | ||
Company's share of net income (loss) | $ (222,685) | $ (247,717) |
Paradise on Wings Franchise Group, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | 384,653 | 348,781 |
Operating expenses | (830,023) | (585,384) |
Loss from operations | (445,370) | (236,603) |
Other expense | (258,832) | |
Net loss | (445,370) | (495,435) |
Company's share of net income (loss) | $ (222,685) | $ (247,717) |
Investment in Paradise on Win39
Investment in Paradise on Wings - Summary of the unaudited balance sheet of Paradise on Wings (Details 1) - Paradise on Wings Franchise Group, LLC - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 3,549 | $ 62,460 |
Equity investment | 141,168 | 141,168 |
Total assets | 144,717 | 203,628 |
Total liabilities | 110,596 | 101,023 |
Equity | 34,121 | 102,605 |
Total liabilities and equity | $ 144,717 | $ 203,628 |
Investment in Paradise on Win40
Investment in Paradise on Wings (Detail Textuals) | 1 Months Ended | 12 Months Ended |
Jan. 20, 2014USD ($)UnitConcession_stands$ / sharesshares | Dec. 31, 2016USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||
Percentage of preferred right to distributions related to income, gain, losses, deductions and expenses | 100.00% | |
Loss on impairment of investment | $ 348,143 | |
Paradise on Wings Franchise Group, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Percentage of ownership interest | 50.00% | 50.00% |
Paradise on Wings Franchise Group, LLC | Contribution agreement | Class A Membership Interests | ||
Schedule of Equity Method Investments [Line Items] | ||
Membership interest acquired | Unit | 117.65 | |
Percentage of ownership interest | 50.00% | |
Percentage of vote for all managers | 50.00% | |
Percentage of vote for use of contributed capital for permitted purpose | 60.00% | |
Percentage of preferred right to distributions related to income, gain, losses, deductions and expenses | 50.00% | |
Paradise on Wings Franchise Group, LLC | Contribution agreement | Class A Membership Interests | Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Threshold limit for appointment of manager | Concession_stands | 2 | |
Paradise on Wings Franchise Group, LLC | Contribution agreement | Class B Membership Interests | ||
Schedule of Equity Method Investments [Line Items] | ||
Membership interest acquired | Unit | 117.65 | |
Percentage of ownership interest | 50.00% | |
Agreed payment in cash as per terms of contribution agreement | $ 400,000 | |
Consideration paid prior to closing of agreement | 350,000 | |
Amount due upon closing of agreement | 50,000 | |
Consideration paid in shares for capital contribution | $ 400,000 | |
Bid price per share on morning of closing date | $ / shares | $ 1.70 | |
Number of shares issued on closing date | shares | 235,295 | |
Threshold limit for appointment of manager | Concession_stands | 1 | |
Percentage of vote for all managers | 50.00% | |
Percentage of vote for use of contributed capital for permitted purpose | 60.00% | |
Percentage of preferred right to distributions related to income, gain, losses, deductions and expenses | 50.00% |
Acquisition of Seediv (Details)
Acquisition of Seediv (Details) - Acquisition of Seediv | Dec. 19, 2016USD ($) |
Business Acquisition [Line Items] | |
Cash and cash equivalents | $ 18,089 |
Inventory | 40,574 |
Other current assets | 6,538 |
Leasehold improvements, net | 46,541 |
Furniture and equipment, net | 33,701 |
Total assets acquired | 145,443 |
Accounts payable - related party | (1,026) |
Accrued expenses | (126,878) |
Notes payable - related party | (234,286) |
Total liabilities assumed | (362,190) |
Seediv compensation expense | 251,309 |
Net consideration paid | $ 34,562 |
Acquisition of Seediv (Details
Acquisition of Seediv (Details 1) - Acquisition of Seediv - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Revenue | $ 4,643,904 | $ 4,316,518 |
Loss from continuing operations | (895,371) | (107,918) |
Net loss | $ (1,516,949) | $ (587,094) |
Net loss per share - basic and fully diluted | $ (0.23) | $ (0.09) |
Acquisition of Seediv (Detail43
Acquisition of Seediv (Details Textuals) | Dec. 31, 2016USD ($) | Dec. 19, 2016USD ($) | Dec. 31, 2016USD ($)Restaurant | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | ||||
Cash payment | $ (4,424) | |||
Number of franchised restaurants | Restaurant | 22 | |||
Revenue | $ 1,275,448 | $ 966,931 | ||
Net income (loss) | (863,576) | (432,730) | ||
General and Administrative Expense [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition related costs | $ 50,000 | |||
DWG acquisitions LLC | ||||
Business Acquisition [Line Items] | ||||
Number of franchised restaurants | Restaurant | 6 | |||
Blue Victory Holdings Inc | ||||
Business Acquisition [Line Items] | ||||
Proceeds from related party debt | $ 840,353 | $ 1,987,953 | ||
Seenu G Kasturi | ||||
Business Acquisition [Line Items] | ||||
Percentage of ownership interest | 14.80% | |||
Seenu G Kasturi | Blue Victory Holdings Inc | ||||
Business Acquisition [Line Items] | ||||
Percentage of ownership interest | 90.00% | |||
Acquisition of Seediv | ||||
Business Acquisition [Line Items] | ||||
Payment agreed for membership interests | $ 600,000 | |||
Cash payment | $ 13,665 | |||
Multiplier for earn out payment | 5.5 | |||
Revenue | $ 130,861 | |||
Net income (loss) | $ 13,210 | |||
Acquisition of Seediv | DWG acquisitions LLC | ||||
Business Acquisition [Line Items] | ||||
Cancellation and termination of accounts receivable | $ 259,123 | |||
Acquisition of Seediv | Racing QSR, LLC | ||||
Business Acquisition [Line Items] | ||||
Cancellation and termination of debt | $ 327,212 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory [Line Items] | ||
Total | $ 45,250 | |
Food | ||
Inventory [Line Items] | ||
Total | 25,942 | |
Beverages | ||
Inventory [Line Items] | ||
Total | $ 19,308 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 112,265 | |
Less: accumulated depreciation | (31,317) | |
Total | 80,948 | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 62,125 | |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 50,140 |
Property and Equipment, Net (46
Property and Equipment, Net (Detail Textuals) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Property, Plant and Equipment [Abstract] | |
Depreciation expense | $ 507 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of equity investment within fair value hierarchy utilized to measure fair value on recurring basis (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment in Paradise on Wings | $ 570,828 | |
Contingent consideration | $ 20,897 | |
Recurring basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment in Paradise on Wings | ||
Contingent consideration | ||
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment in Paradise on Wings | 570,828 | |
Contingent consideration | ||
Recurring basis | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity investment in Paradise on Wings | ||
Contingent consideration | $ 20,897 |
Fair Value Measurements (Detail
Fair Value Measurements (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Jan. 20, 2014 | |
Fair Value [Line Items] | |||
Loss on impairment of investment | $ (348,143) | ||
Contingent consideration | $ 20,897 | ||
Paradise on Wings Franchise Group, LLC | |||
Fair Value [Line Items] | |||
Percentage of ownership interest | 50.00% | 50.00% | |
Net loss | $ (445,370) | $ (495,435) |
Notes Receivable (Detail Textua
Notes Receivable (Detail Textuals) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Sep. 30, 2016 | Jun. 30, 2016 | Oct. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2013 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Payments to acquire notes receivable | $ 2,512 | ||||||
Notes receivable, net - related party | 121,638 | ||||||
Notes receivable for payment of franchisee fees owed | $ 86,717 | ||||||
Remaining balance of notes receivable for payment of franchise fees, royalties or other revenue owed | (419,849) | (297,918) | |||||
Interest receivable, net | 838 | ||||||
Interest income - related party | 6,316 | ||||||
Interest income | 896 | ||||||
Allowance for uncollectible interest receivable | 13,552 | ||||||
Repayments of notes payable - related party | 824,250 | 1,991,373 | |||||
Principal outstanding under loan | 1,783 | 3,892 | |||||
Principal of accrued interest was outstanding | 78,020 | ||||||
Cash paid for interest | |||||||
Interest receivable outstanding | 838 | 13,552 | |||||
Notes receivable | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Carrying value of outstanding notes receivable | 93,121 | 128,042 | |||||
Notes receivable for payment of franchisee fees owed | 6,404 | ||||||
Remaining balance of notes receivable for payment of franchise fees, royalties or other revenue owed | 121,638 | ||||||
Notes receivable | One of franchisees | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Aggregate original principal amount | $ 13,869 | $ 6,329 | |||||
Term of notes receivable | 3 years | ||||||
Payments to acquire notes receivable | 2,109 | 1,934 | |||||
Proceeds from notes receivable from related party | 551 | ||||||
Accrued interest rate per year | 5.00% | ||||||
Principal of accrued interest was outstanding | 13,318 | ||||||
Cash paid for interest | 57 | ||||||
Notes receivable | One of franchisees | Promissory notes | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Aggregate original principal amount | $ 25,000 | ||||||
Term of notes receivable | 2 years | ||||||
Accrued interest rate per year | 5.00% | ||||||
Notes receivable | One of franchisees | Line of credit | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Aggregate original principal amount | $ 28,020 | ||||||
Outstanding amount under line of credit | $ 25,000 | ||||||
Notes receivable | Certain franchisees | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Aggregate original principal amount | $ 40,507 | ||||||
Payments to acquire notes receivable | 2,512 | 2,652 | |||||
Notes receivable | Yobe Acquisition, LLC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Payments to acquire notes receivable | $ 3,700 | ||||||
Accrued interest rate per year | 6.00% | ||||||
Notes receivable | Racing QSR, LLC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Payments to acquire notes receivable | $ 419,849 | $ 121,638 | |||||
Accrued interest rate per year | 6.00% |
Debt Obligations - Summary of c
Debt Obligations - Summary of carrying value of outstanding promissory notes, net of unamortized discount (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Notes payable - related party | $ 232,572 | |
Notes payable - in default | 7,000 | $ 7,000 |
Total notes payable, net | $ 239,572 | $ 7,000 |
Debt Obligations (Detail Textua
Debt Obligations (Detail Textuals) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Outstanding promissory notes, net of unamortized discount | $ 239,572 | $ 7,000 |
Notes payable - in default | 7,000 | 7,000 |
Accrued interest under outstanding promissory notes | $ 2,594 | $ 2,173 |
Debt Obligations (Detail Text52
Debt Obligations (Detail Textuals 1) - Promissory notes | 1 Months Ended | ||||
Dec. 28, 2008USD ($)Investor | Dec. 31, 2016USD ($) | Dec. 19, 2016USD ($) | Dec. 31, 2015USD ($) | Apr. 30, 2015USD ($) | |
Blue Victory Holdings, Inc | Seediv, LLC | |||||
Debt Instrument [Line Items] | |||||
Aggregate original principal amount | $ 216,469 | ||||
Interest rate per annum on notes | 6.00% | ||||
Investors | |||||
Debt Instrument [Line Items] | |||||
Promissory notes issued, number of investors | Investor | 4 | ||||
Aggregate original principal amount | $ 11,000 | $ 4,000 | |||
Proceeds from issuance of notes payable | $ 11,000 | ||||
Interest rate per annum on notes | 6.00% | ||||
Maturity period of promissory notes | 3 years | ||||
Percentage of principal amount of notes for the payment of a penalty | 10.00% | ||||
Outstanding amount under line of credit | $ 7,000 | $ 7,000 |
Debt Obligations (Detail Text53
Debt Obligations (Detail Textuals 2) - Blue Victory Holdings, Inc - Loan agreement - Revolving line of credit facility | Sep. 13, 2013USD ($) |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1,000,000 |
Maximum amount of debt not to be exceeded every month | $ 150,000 |
Accrued interest | 6.00% |
Debt Obligations (Detail Text54
Debt Obligations (Detail Textuals 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 28, 2014 | |
Debt Instrument [Line Items] | |||
Payments on notes payable in settlement and release agreement | $ 4,000 | ||
Outstanding promissory notes, net of unamortized discount | $ 239,572 | 7,000 | |
Repayments of notes payable - related party | (824,250) | (1,991,373) | |
Revolving line of credit facility | |||
Debt Instrument [Line Items] | |||
Credit facility, principal and accrued interest outstanding | 16,103 | ||
Proceeds from related party debt | 840,353 | ||
Repayments of notes payable - related party | (824,250) | ||
Revolving line of credit facility | Blue Victory Holdings | Loan agreement | |||
Debt Instrument [Line Items] | |||
Additional borrowing under credit facility | 1,987,953 | ||
Credit facility, principal and accrued interest outstanding | $ 16,103 | $ 3,420 | |
Repayments of notes payable - related party | $ (1,991,373) |
Capital Stock (Detail Textuals)
Capital Stock (Detail Textuals) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Capital Stock [Line Items] | ||
Class A common stock, shares authorized | 100,000,000 | 100,000,000 |
Class A common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Class A common stock, shares outstanding | 6,647,464 | 6,521,035 |
Capital Stock (Detail Textuals
Capital Stock (Detail Textuals 1) | 1 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2016shares | Aug. 31, 2016USD ($) | Aug. 31, 2015shares | Feb. 28, 2015shares | Jan. 31, 2015USD ($)shares | Feb. 27, 2014USD ($)Installmentshares | Jul. 22, 2013USD ($)shares | Jan. 31, 2013USD ($) | Jan. 22, 2013USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) | |
Capital Stock [Line Items] | |||||||||||
Common stock issued for note receivable - related party | $ 170,000 | ||||||||||
Stock issued for settlement of litigation | $ 19,551 | 90,000 | |||||||||
Share-Based Compensation | $ 91,200 | 59,012 | |||||||||
Securities purchase agreement | Seenu G Kasturi | |||||||||||
Capital Stock [Line Items] | |||||||||||
Common stock issued for note receivable - related party (in shares) | shares | 206,061 | ||||||||||
Common stock issued for note receivable - related party | $ 340,000 | ||||||||||
Interest rate per annum | 6.00% | ||||||||||
Number of installment | Installment | 4 | ||||||||||
Frequency of periodic payment | quarterly | ||||||||||
Principal and interest payable in four equal quarterly installments | $ 85,000 | ||||||||||
Employment agreement | Richard W Akam | |||||||||||
Capital Stock [Line Items] | |||||||||||
Amount of common stock connection with employee agreement | $ 50,000 | $ 50,000 | $ 50,000 | ||||||||
Number of common stock issued in connection with employment agreement | shares | 71,429 | 71,429 | 71,429 | ||||||||
Amount of additional shares of common stock to be issued | $ 50,000 | ||||||||||
Allocated share-based compensation expense | $ 137 | 548 | |||||||||
Employment agreement | Richard W Akam | Stock to be issued on January 1, 2016 | |||||||||||
Capital Stock [Line Items] | |||||||||||
Allocated share-based compensation expense | 49,863 | ||||||||||
Employment agreement | Richard W Akam | Stock to be issued on January 1, 2017 | |||||||||||
Capital Stock [Line Items] | |||||||||||
Allocated share-based compensation expense | 49,863 | ||||||||||
Employment agreement | Non-executive employees one | |||||||||||
Capital Stock [Line Items] | |||||||||||
Number of common stock issued in connection with employment agreement | shares | 20,000 | 10,000 | |||||||||
Allocated share-based compensation expense | $ 41,200 | 2,000 | |||||||||
Employment agreement | Non-executive employees two | |||||||||||
Capital Stock [Line Items] | |||||||||||
Number of common stock issued in connection with employment agreement | shares | 20,000 | ||||||||||
Allocated share-based compensation expense | $ 6,600 | ||||||||||
Employment agreement | J. David Eberle | |||||||||||
Capital Stock [Line Items] | |||||||||||
Amount of common stock connection with employee agreement | $ 57,142 | ||||||||||
Value of common stock issued in connection with employment agreement | 17,143 | ||||||||||
Litigation settlement expense | 27,143 | ||||||||||
Litigation settlement amount | 100,000 | ||||||||||
Stock issued for settlement of litigation | $ 90,000 | ||||||||||
Settlement and Release Agreement | Guiseppe Cala | |||||||||||
Capital Stock [Line Items] | |||||||||||
Litigation settlement amount | $ 15,000 | ||||||||||
Stock issued for settlement of litigation | $ 35,000 |
Stock Compensation Plans (Detai
Stock Compensation Plans (Detail Textuals) - shares | Dec. 31, 2016 | Jun. 30, 2014 | Aug. 31, 2011 | Aug. 18, 2011 |
2011 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common stock granted to employees, officers and directors of, and consultants and advisors | 1,214,286 | |||
Number of common stock available for issuance | 142,858 | 1,214,286 | ||
2014 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common stock granted to employees, officers and directors of, and consultants and advisors | 1,000,000 | |||
Number of common stock available for issuance | 1,000,000 |
Commitments and Contingencies58
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Straight-lined minimum rent | $ 29,554 | $ 21,039 |
Contingent rent | ||
Other | ||
Total | $ 29,554 | $ 21,039 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of future minimum annual payments (Details 1) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 35,269 |
2,018 | 2,200 |
2,019 | |
2,020 | |
2,021 | |
Thereafter | |
Total | $ 37,469 |
Commitments and Contingencies60
Commitments and Contingencies (Detail Textuals) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Jan. 31, 2015 | Aug. 19, 2013 | Jul. 22, 2013 | Jan. 31, 2013 | Jan. 22, 2013 | Dec. 31, 2016 | |
Commitments And Contingencies [Line Items] | ||||||
Term of agreement | 10 years | |||||
Daniel Slone | ||||||
Commitments And Contingencies [Line Items] | ||||||
Annual compensation | $ 1 | |||||
Employment Agreement | Richard W Akam | ||||||
Commitments And Contingencies [Line Items] | ||||||
Term of agreement | 1 year | |||||
Annual compensation | $ 150,000 | |||||
Additional renewal term of agreement | 1 year | |||||
Number of common stock issued in connection with employment agreement | 71,429 | 71,429 | 71,429 | |||
Amount of common stock connection with employee agreement | $ 50,000 | $ 50,000 | $ 50,000 | |||
Amount of additional shares of common stock to be issued | $ 50,000 |
Commitments and Contingencies61
Commitments and Contingencies (Detail Textuals 1) | 1 Months Ended | ||||
Dec. 20, 2016USD ($) | Jan. 31, 2015USD ($)ft² | May 31, 2014ft² | Oct. 31, 2013USD ($)ft² | Jan. 31, 2013USD ($)ft² | |
Corporate Headquarters | |||||
Commitments And Contingencies [Line Items] | |||||
Area of land leased | ft² | 2,000 | 1,800 | |||
Fixed monthly rent payment | $ | $ 1,806 | $ 1,100 | |||
Lease expires date | Dec. 31, 2017 | Jan. 31, 2015 | |||
Nocatee Restaurant | |||||
Commitments And Contingencies [Line Items] | |||||
Area of land leased | ft² | 2,900 | ||||
Fixed monthly rent payment | $ | $ 1,100 | ||||
Percentage increase in additional annual rent payment | 6.00% | ||||
Initial term of lease | 53 months | ||||
Additional term of lease | 60 months | ||||
Youngerman Circle Restaurant | |||||
Commitments And Contingencies [Line Items] | |||||
Area of land leased | ft² | 6,500 | ||||
Fixed monthly rent payment | $ | $ 10,000 | ||||
Percentage increase in additional annual rent payment | 13.00% | 7.00% | |||
Initial term of lease | 20 years | 10 years | |||
Additional term of lease | 5 years | 1 year | |||
Initial base rent payment Percentage of net sales | 7.50% |
Related-Party Transactions (Det
Related-Party Transactions (Detail Textuals) | 1 Months Ended | 12 Months Ended | ||||||||||||
Jul. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Feb. 27, 2014USD ($)shares | Aug. 31, 2013USD ($) | Jul. 31, 2013 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 19, 2016USD ($) | Mar. 31, 2016 | Dec. 31, 2014 | Dec. 28, 2014USD ($) | May 31, 2014ft² | Sep. 13, 2013USD ($) | |
Related Party Transaction [Line Items] | ||||||||||||||
Term of agreement | 10 years | |||||||||||||
Revenue from related parties | $ 513,796 | $ 467,700 | ||||||||||||
Common stock issued for note receivable - related party | 170,000 | |||||||||||||
Repayments of notes payable - related party | $ 824,250 | 1,991,373 | ||||||||||||
Payments to acquire notes receivable | 2,512 | |||||||||||||
Youngerman Circle Restaurant | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Area of land leased | ft² | 6,500 | |||||||||||||
Revolving line of credit facility | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Proceeds from related party debt | $ 840,353 | |||||||||||||
Repayments of notes payable - related party | 824,250 | |||||||||||||
Outstanding principal amount of credit facility | 16,103 | |||||||||||||
Seenu G Kasturi | Blue Victory Holdings | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Proceeds from related party debt | 840,353 | 1,987,953 | ||||||||||||
Repayments of notes payable - related party | $ 824,250 | $ 1,991,373 | ||||||||||||
Seenu G Kasturi | Racing QSR, LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 8.70% | 8.70% | ||||||||||||
DWG acquisitions LLC | Seenu G Kasturi | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Yobe Acquisition, LLC | Seenu G Kasturi | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 8.70% | |||||||||||||
Loan agreement | Revolving line of credit facility | Blue Victory Holdings | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Interest rate per annum | 6.00% | |||||||||||||
Maximum borrowing capacity | $ 1,000,000 | |||||||||||||
Repayments of notes payable - related party | $ 1,991,373 | |||||||||||||
Outstanding principal amount of credit facility | $ 16,103 | $ 3,420 | ||||||||||||
Loan agreement | Seenu G Kasturi | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Loan agreement | Seenu G Kasturi | Blue Victory Holdings | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Equity interest held | 90.00% | |||||||||||||
Subcontractor concession agreement | DWG acquisitions LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Revenue from related parties | $ 35,000 | $ 39,000 | ||||||||||||
Subcontractor concession agreement | DWG acquisitions LLC | Levy Premium Food service Limited Partnership | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Subcontracting monthly fees | $ 2,000 | |||||||||||||
Subcontractor concession agreement | DWG acquisitions LLC | Ovations Food Services, L.P. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Extended term of agreement | 2 years | |||||||||||||
Subcontracting monthly fees | $ 3,000 | |||||||||||||
Net amount of fees generated during period | $ (496) | |||||||||||||
Securities purchase agreement | Seenu G Kasturi | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Interest rate per annum | 6.00% | |||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Common stock issued for note receivable - related party (in shares) | shares | 206,061 | |||||||||||||
Common stock issued for note receivable - related party | $ 340,000 | |||||||||||||
Securities purchase agreement | Seenu G Kasturi | Blue Victory Holdings | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Equity interest held | 90.00% | |||||||||||||
Franchise agreement | DWG acquisitions LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Royalty revenue | $ 478,796 | 428,700 | ||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | Jacksonville, Florida | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Royalty revenue | $ 90,467 | 98,802 | ||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | Valdosta, Georgia | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Royalty revenue | $ 46,535 | 58,180 | ||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | Tifton, Georgia | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Royalty revenue | $ 35,070 | 44,901 | ||||||||||||
Franchise fee | 30,000 | |||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | Fleming Island, Florida | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Royalty revenue | $ 44,986 | 32,819 | ||||||||||||
Franchise fee | 30,000 | |||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | Panama City Beach, Florida | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Royalty revenue | $ 52,564 | 16,372 | ||||||||||||
Franchise fee | 30,000 | |||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | Pensacola, Florida | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Royalty revenue | 29,789 | |||||||||||||
Franchise fee | $ 30,000 | |||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | Kingsland, Georgia | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% | |||||||||||||
Royalty revenue | $ 44,659 | |||||||||||||
Franchise fee | 30,000 | |||||||||||||
Franchise agreement | DWG acquisitions LLC | Seenu G Kasturi | Ponte Vedra, Florida | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Royalty revenue | 74,726 | 69,545 | ||||||||||||
Sponsorship agreement | Jacksonville Jaguars, LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Term of agreement | 3 years | |||||||||||||
Notes receivable | Racing QSR, LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Payments to acquire notes receivable | $ 419,849 | $ 121,638 | ||||||||||||
Notes receivable | Yobe Acquisition, LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Payments to acquire notes receivable | $ 3,700 | |||||||||||||
Notes receivable | Quantum Leap QSR, LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Interest rate per annum | 6.00% | |||||||||||||
Promissory notes | Seediv, LLC | Blue Victory Holdings | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Interest rate per annum | 6.00% | |||||||||||||
Aggregate original principal amount | $ 216,469 | |||||||||||||
Promissory notes | Seediv, LLC | Seenu G Kasturi | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership percentage in common stock of company | 14.80% |
Judgments in Legal Proceedings
Judgments in Legal Proceedings (Detail Textuals) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Jan. 31, 2010 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loss Contingencies [Line Items] | ||||
Gain on settlement of liabilities | $ 175,449 | |||
Settlement Agreement | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement amount | $ 250,000 | |||
Payments for legal settlement | $ 40,000 | |||
Amount payable of legal settlement | $ 210,000 | |||
Settlement and Release Agreement | Guiseppe Cala | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement amount | $ 15,000 | |||
Amount payable of legal settlement | 210,000 | |||
Stock issued during period for litigation settlements | 35,000 | |||
Gain on settlement of liabilities | $ 175,449 |
Judgments in Legal Proceeding64
Judgments in Legal Proceedings (Detail Textuals 1) - USD ($) | Nov. 11, 2011 | Oct. 04, 2011 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 25, 2011 |
Loss Contingencies [Line Items] | |||||
Loss from legal proceedings | $ 82,642 | $ (221,323) | |||
Breach of guarantee | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement amount | $ 161,747 | ||||
Litigation settlement expense | $ 33,000 | ||||
Accrued interest of litigation settlement | $ 2,369 | ||||
Loss from legal proceedings | $ 197,116 | ||||
Interest expense | $ 11,303 | $ 11,365 |
Judgments in Legal Proceeding65
Judgments in Legal Proceedings (Detail Textuals 2) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Apr. 30, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loss Contingencies [Line Items] | ||||
Loss contingency damages sought | $ 194,181 | $ 111,539 | ||
Gain / (loss) on settlement of litigation | 82,642 | $ (221,323) | ||
Accrued interest outstanding | 25,980 | |||
Other expenses outstanding | 10,586 | |||
Accrued legal settlement | $ 148,105 | 194,181 | ||
J. David Eberle | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency damages sought | $ 448.08 | |||
J. David Eberle | Settlement and Release Agreement | ||||
Loss Contingencies [Line Items] | ||||
Settlement agreement payable | 100,000 | |||
Settlement agreement payable monthly installment | $ 16,667 | |||
Stock issued during period for litigation settlements | 57,142 | |||
Gain / (loss) on settlement of litigation | $ 27,142 |
Subsequent Events (Detail Textu
Subsequent Events (Detail Textuals) - USD ($) | Apr. 01, 2017 | Jan. 18, 2017 | Jan. 31, 2015 | Jul. 22, 2013 | Jan. 22, 2013 | Dec. 31, 2016 | Mar. 24, 2017 | Sep. 13, 2013 |
Subsequent Event [Line Items] | ||||||||
Term of agreement | 10 years | |||||||
Loan agreement | Blue Victory Holdings, Inc | Line of credit facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity | $ 1,000,000 | |||||||
Richard W Akam | Employment Agreement | ||||||||
Subsequent Event [Line Items] | ||||||||
Term of agreement | 1 year | |||||||
Additional renewal term of agreement | 1 year | |||||||
Annual compensation | $ 150,000 | |||||||
Number of common shares issued | 71,429 | 71,429 | 71,429 | |||||
Subsequent Event | Loan agreement | Blue Victory Holdings, Inc | Line of credit facility | ||||||||
Subsequent Event [Line Items] | ||||||||
Maximum borrowing capacity | $ 50,000 | |||||||
Subsequent Event | Seenu G Kasturi | Employment Agreement | ||||||||
Subsequent Event [Line Items] | ||||||||
Term of agreement | 3 years | |||||||
Additional renewal term of agreement | 1 year | |||||||
Initial annual base salary | $ 80,000 | |||||||
Annual compensation | 26,000 | |||||||
Value of equity awards | $ 54,000 | |||||||
Number of common shares issued | 10,537 |