Cover
Cover - USD ($) | 12 Months Ended | ||
Jan. 02, 2023 | Mar. 27, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --01-02 | ||
Document Period End Date | Jan. 02, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-38417 | ||
Entity Registrant Name | BurgerFi International, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-2418815 | ||
Entity Address, Address Line One | 200 West Cypress Creek Rd., | ||
Entity Address, Address Line Two | Suite 220 | ||
Entity Address, City or Town | Fort Lauderdale | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33309 | ||
City Area Code | (954) | ||
Local Phone Number | 618-2000 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 52,015,985 | ||
Entity Common Stock, Shares Outstanding | 23,823,105 | ||
Entity Central Index Key | 0001723580 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Common Stock, par value $0.0001 per share | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | BFI | ||
Security Exchange Name | NASDAQ | ||
Redeemable warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Redeemable warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share | ||
Trading Symbol | BFIIW | ||
Security Exchange Name | NASDAQ |
Audit Information
Audit Information | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Audit Information [Abstract] | ||
Auditor Firm ID | 185 | 243 |
Auditor Name | KPMG LLP | BDO USA, LLP |
Auditor Location | Miami, Florida | West Palm Beach, Florida |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 11,917 | $ 14,889 |
Accounts receivable, net | 1,766 | 1,689 |
Inventory | 1,320 | 1,387 |
Asset held for sale | 732 | 732 |
Other current assets | 2,724 | 2,526 |
Total Current Assets | 18,459 | 21,223 |
Property & equipment, net | 19,371 | 29,035 |
Operating right-of-use assets, net | 45,741 | 0 |
Goodwill | 31,621 | 98,000 |
Intangible assets, net | 160,208 | 168,723 |
Other assets | 1,380 | 738 |
Total Assets | 276,780 | 317,719 |
Current Liabilities | ||
Accounts payable - trade and other | 8,464 | 7,841 |
Accrued expenses | 10,589 | 5,302 |
Short-term operating lease liability | 9,924 | 0 |
Other liabilities | 6,241 | 7,856 |
Short-term borrowings | 4,985 | 3,331 |
Total Current Liabilities | 40,203 | 24,330 |
Non-Current Liabilities | ||
Long-term borrowings | 53,794 | 56,797 |
Redeemable preferred stock, $0.0001 par value, 10,000,000 shares authorized, 2,120,000 shares issued and outstanding, $53 million principal redemption value | 51,418 | 47,525 |
Long-term operating lease liability | 40,748 | 0 |
Related party note payable | 9,235 | 8,724 |
Warrant liability | 195 | 2,706 |
Other non-current liabilities | 1,017 | 3,009 |
Deferred income taxes | 1,223 | 1,353 |
Total Liabilities | 197,833 | 144,444 |
Commitments and Contingencies - Note 7 | ||
Stockholders' Equity | ||
Common stock, $0.0001 par value, 100,000,000 shares authorized, 22,257,772 and 21,303,500 shares issued and outstanding as of January 2, 2023 and December 31, 2021, respectively | 2 | 2 |
Additional paid-in capital | 306,096 | 296,992 |
Accumulated deficit | (227,151) | (123,719) |
Total Stockholders' Equity | 78,947 | 173,275 |
Total Liabilities and Stockholders' Equity | $ 276,780 | $ 317,719 |
Common stock, shares issued | 22,257,772 | 21,303,500 |
Common stock, shares outstanding | 22,257,772 | 21,303,500 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jan. 02, 2023 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 2,120,000 | 2,120,000 |
Preferred stock, shares outstanding | 2,120,000 | 2,120,000 |
Preferred stock, redemption value | $ 53 | $ 53 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 22,257,772 | 21,303,500 |
Common stock, shares outstanding | 22,257,772 | 21,303,500 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
REVENUE | ||
Restaurant sales | $ 167,201 | $ 57,790 |
Total Revenue | 178,720 | 68,867 |
Restaurant level operating expenses: | ||
Food, beverage and paper costs | 48,487 | 17,153 |
Labor and related expenses | 49,785 | 16,272 |
Other operating expenses | 30,277 | 12,039 |
Occupancy and related expenses | 15,607 | 4,940 |
General and administrative expenses | 25,974 | 17,300 |
Depreciation and amortization expense | 17,138 | 10,060 |
Share-based compensation expense | 10,239 | 7,573 |
Brand development, co-op and advertising expense | 3,870 | 2,462 |
Goodwill and intangible asset impairment | 66,569 | 114,797 |
Asset impairment | 6,946 | 0 |
Store closure costs | 1,949 | 0 |
Store closure costs | 1,459 | 0 |
Pre-opening costs | 474 | 1,905 |
Operating Loss | (100,054) | (135,634) |
Other income, net | 2,675 | 2,047 |
Gain on change in value of warrant liability | 2,511 | 13,811 |
Interest expense, net | (8,659) | (1,406) |
Loss before Income Taxes | (103,527) | (121,182) |
Income tax benefit (expense) | 95 | (312) |
Net Loss | $ (103,432) | $ (121,494) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 22,173,694 | 18,408,247 |
Diluted (in shares) | 22,173,694 | 18,624,447 |
Net Loss per common share: | ||
Basic (in shares) | $ (4.66) | $ (6.60) |
Diluted (in shares) | $ (4.66) | $ (7.20) |
Royalty and other fees | ||
REVENUE | ||
Other revenues | $ 9,733 | $ 9,090 |
Royalty - brand development and co-op | ||
REVENUE | ||
Other revenues | $ 1,786 | $ 1,987 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 17,541,838 | ||||
Balance at beginning of period at Dec. 31, 2020 | $ 259,075 | $ 2 | $ 261,298 | $ (2,225) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 7,573 | 7,573 | |||
Stock issued in acquisition of Anthony's (in shares) | 3,362,424 | ||||
Stock issued in acquisition of Anthony's | 28,120 | 28,120 | |||
Vested shares issued (in shares) | 107,500 | ||||
Shares issued for warrant exercises (in shares) | 8,069 | ||||
Shares issued for warrant exercises | 1 | 1 | |||
Exchange of unit purchase option units (in shares) | 283,669 | ||||
Net loss | (121,494) | (121,494) | |||
Balance at end of period (in shares) at Dec. 31, 2021 | 21,303,500 | ||||
Balance at end of period at Dec. 31, 2021 | 173,275 | $ 2 | 296,992 | (123,719) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 10,239 | 10,239 | |||
Stock issued in acquisition of Anthony's (in shares) | [1] | 123,131 | |||
Vested shares issued (in shares) | 1,001,532 | ||||
Shares withheld for taxes (in shares) | (170,391) | ||||
Shares withheld for taxes | (1,135) | (1,135) | |||
Net loss | (103,432) | (103,432) | |||
Balance at end of period (in shares) at Jan. 02, 2023 | 22,257,772 | ||||
Balance at end of period at Jan. 02, 2023 | $ 78,947 | $ 2 | $ 306,096 | $ (227,151) | |
[1] 1 Timing of share issuance differs from recognition of related financial statement dollar amounts. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Cash Flows Provided By (Used In) Operating Activities | ||
Net loss | $ (103,432) | $ (121,494) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Goodwill and intangible asset impairment | 66,569 | 114,797 |
Asset impairment | 6,946 | 0 |
Gain on change in value of warrant liability | (2,511) | (13,811) |
Depreciation and amortization | 17,138 | 10,060 |
Share-based compensation expense | 10,239 | 7,573 |
Forfeited franchise deposits | (1,481) | (834) |
Deferred income taxes | (130) | 312 |
Non-cash interest | 4,457 | 841 |
Provision for bad debts | 8 | 234 |
Loss on disposal of property & equipment | 38 | 203 |
Store closure costs | 661 | 0 |
Non-cash lease cost | 185 | 0 |
Gain on extinguishment of debt | 0 | (2,237) |
Changes in operating assets and liabilities, net of acquisitions | ||
Accounts receivable | (268) | (633) |
Inventory | 67 | (142) |
Other assets | (499) | 81 |
Accounts payable - trade and other | 224 | 303 |
Accrued expenses | 3,576 | (4,045) |
Deferred rent | 0 | 871 |
Deferred revenue and other liabilities | 381 | 454 |
Cash Flows Provided By (Used In) Operating Activities | 2,168 | (7,467) |
Net Cash Flows From Investing Activities | ||
Purchase of property & equipment | (2,517) | (10,665) |
Cash acquired as part of the Anthony's acquisition | 0 | 5,522 |
Proceeds from the sale of property & equipment | 1,087 | 80 |
Other investing activities | (119) | 48 |
Net Cash Flows Used In Investing Activities | (1,549) | (5,015) |
Net Cash Flows From Financing Activities | ||
Proceeds from borrowings | 1,500 | 0 |
Payments on borrowings | (3,339) | (12,168) |
Payment of direct costs on issuance of common stock | (1,089) | (844) |
Debt issuance costs | (486) | 0 |
Repayments of finance leases | (177) | 0 |
Net Cash Flows Used In Financing Activities | (3,591) | (13,012) |
Net Decrease in Cash and Cash Equivalents | (2,972) | (25,494) |
Cash and Cash Equivalents, beginning of year | 14,889 | 40,383 |
Cash and Cash Equivalents, end of year | 11,917 | 14,889 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 2,884 | 551 |
Value of common stock issued in Anthony's acquisition | 0 | 28,965 |
Value of preferred stock issued in Anthony's acquisition | 0 | 46,906 |
Cash paid for income taxes | $ 0 | $ 7 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 02, 2023 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization BurgerFi International, Inc. and its wholly owned subsidiaries ( “BFI,” the “Company,” also “we,” “us,” and “our” ), is a multi-brand restaurant company that develops, markets and acquires fast-casual and premium-casual dining restaurant concepts around the world, including corporate-owned stores and franchises located in the United States and Saudi Arabia. As of January 2, 2023, the Company has 174 franchised and corporate-owned restaurants of the two following brands: BurgerFi . BurgerFi is a fast-casual “better burger” concept with 114 franchised and corporate-owned restaurants as of January 2, 2023, offering burgers, hot dogs, crispy chicken, frozen custard, hand-cut fries, shakes, beer, wine and more. Anthony’s . Anthony’s is a pizza and wing brand that operated 60 corporate-owned casual restaurant locations, as of January 2, 2023. The concept is centered around a coal fired oven, and its menu offers “well-done” pizza, coal fired chicken wings, homemade meatballs, and a variety of handcrafted sandwiches and salads. Basis of presentation The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America ( “GAAP” ) and the rules and regulations of the Securities and Exchange Commission ( “SEC” ) assuming the Company will continue as a going concern. T he going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, during the third quarter of 2022, substantial doubt about the Company’s ability to continue as a going concern was raised due to uncertainty surrounding the Company’s ability to comply with its forecasted financial covenants. The going concern uncertainty was cured by the Credit Agreement, as amended on February 24, 2023. See Note 9, “ Debt ,” for additional disclosure surrounding the amended Credit Agreement. On November 3, 2021, the Company completed the acquisition of Hot Air, Inc. (the "Anthony's acquisition" ), which through its subsidiaries, owns and operates casual dining pizza restaurants under the trade name Anthony’s Coal Fired Pizza & Wings ( "Anthony's" ). The results of operations, financial position and cash flows of Anthony's is included in its consolidated financial statements as of the closing date of the acquisition. On July 28, 2022, the Company's Board of Directors approved the change to a 52-53-week fiscal year ending on the Monday nearest to December 31 of each year in order to improve the alignment of financial and business processes following the acquisition of Anthony’s. With this change, the Company’s fiscal year 2022 ended on January 2, 2023. For the year ended December 31, 2021, the BurgerFi brand operated on a calendar year-end and Anthony's operated on a 52-53 week fiscal year ended on the Monday closest to December 31. Differences arising from the different fiscal year-ends were not deemed material for the year ended December 31, 2021. Reclassifications Certain current year amounts primarily in restaurant level operating expenses, general and administrative expenses and brand development, co-op and advertising expense have been reclassified within the consolidated statements of operations and are not comparable to the year ended December 31, 2021. Principles of Consolidation The consolidated financial statements present the consolidated financial position, results from operations and cash flows of BurgerFi International, Inc., and its wholly owned subsidiaries. All material balances and transactions between the entities have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Corporate-owned stores and Franchised stores The Company grants franchises to independent operators who in turn pay an initial franchise fee, royalties and other fees as stated in the franchise agreement. Store activity for the years ended January 2, 2023 and December 31, 2021 is as follows: 2022 2021 Corporate-owned Franchised Total Corporate-owned Franchised Total Total BurgerFi and Anthony's 85 89 174 86 93 179 BurgerFi stores, beginning of year 25 93 118 17 102 119 BurgerFi stores opened 3 8 11 10 6 16 BurgerFi stores transferred/sold (3) 3 — (1) 1 — BurgerFi stores closed — (15) (15) (1) (16) (17) BurgerFi total stores, end of year 25 89 114 25 93 118 Anthony's stores, beginning of period 61 — 61 — — — Anthony's stores, acquired — — — 61 — 61 Anthony's stores opened — — — — — — Anthony's stores closed (1) — (1) — — — Anthony's total stores, end of year 60 — 60 61 — 61 End of year store totals included one international store for both fiscal year’s ended January 2, 2023 and December 31, 2021, respectively. Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less as cash equivalents. Cash and cash equivalents also include approximately $2.4 million and $1.1 million as of January 2, 2023 and December 31, 2021, respectively, of amounts due from commercial credit card companies, such as Visa, MasterCard, Discover, and American Express, which are generally received within a few days of the related transactions. At times, the balances in the cash and cash equivalents accounts may exceed federal insured limits. The Federal Deposit Insurance Corporation insures eligible accounts up to $250,000 per depositor at each financial institution. The Company limits uninsured balances to only large, well-known financial institutions and believes that it is not exposed to significant credit risk on cash and cash equivalents. Accounts Receivable, net Accounts receivable consist of amounts due from vendors for rebates on purchases of goods and materials, franchisees for training and royalties and are stated at the amount invoiced. Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Management provides for probable uncollectible amounts through a charge to earnings and a credit to allowance for uncollectible accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for uncollectible accounts and a credit to accounts receivable. The allowance for uncollectible accounts was approximately $0.2 million at January 2, 2023, and nominal at December 31, 2021. Employer Retention Tax Credits The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, made a number of changes to employer retention tax credits previously made available under The Coronavirus Aid, Relief, and Economic Security Act, including modifying and extending the Employee Retention Credit (“ ERC ”) for the six calendar months ending June 30, 2021. As a result of such legislation, the Company qualified for ERC for the first and second calendar quarters of 2021 and has applied for ERC through amended payroll tax filings for the applicable quarters. We recognized $2.6 million, net of third party preparation fees, in other income, net related to ERC in the Company's consolidated statements of operations for the year ended January 2, 2023 of which approximately $1.4 million had been collected as of January 2, 2023. As of January 2, 2023, the Company had $1.5 million included in other current assets on its consolidated balance sheets. Inventories Inventories primarily consist of food and beverages. Inventories are accounted for at lower of cost or net realizable value using the first-in, first-out (FIFO) method. Spoilage is expensed as incurred. Property & Equipment, net Property & equipment are carried at cost, net of accumulated depreciation. Depreciation is provided by the straight-line method over an estimated useful life. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful life of the asset and the term of the related lease. The estimated lives for kitchen equipment and other equipment, computers and office equipment, furniture and fixtures, and vehicles range from five Impairment of Long-Lived Assets and Definite-Lived Intangible Assets The Company assesses the potential impairment of its long-lived assets on an annual basis or whenever events or changes in circumstances indicate the carrying value of the assets or asset group may not be recoverable. Factors considered include, but are not limited to, negative cash flow, significant underperformance relative to historical or projected future operating results, significant changes in the manner in which an asset is being used, an expectation that an asset will be disposed of significantly before the end of its previously estimated useful life and significant negative industry or economic trends. At any given time, the Company may be monitoring a small number of locations, and future impairment charges could be required if individual restaurant performance does not improve or if the decision is made to close or relocate a restaurant. If such assets are considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the assets exceeds the fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: 7 years for franchise agreements, 30 years for trade names, 10 years for the license agreement (adjusted to 22 months at December 31, 2021), and 10 years for the VegeFi product. Right of use assets are amortized based on the expected remaining term of the lease agreement which can range from 5 to 10 years at inception of the lease or renewal term. Refer to leases below for discussion of amortization of right of use assets. The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. The Company recorded an impairment charge of approximately $6.9 million during the year ended January 2, 2023, of which $3.1 million related to property & equipment and $3.8 million related to right-of-use assets included in asset impairment on our consolidated statements of operations. For the year ended December 31, 2021 the Company recorded an impairment charge of $8.3 million, of which $7.7 million related to licensing agreements and $0.6 million related to property & equipment included within goodwill and intangible asset impairment on the consolidated statements of operations. Additionally, as a result of impairment of the Company's licensing agreements at December 31, 2021, the Company reevaluated the useful life of 10 years and determined that such useful life be adjusted to 22 months through October 2023. Refer to Note 5, “ Impairment ” and Note 3, “ Intangible Assets, ” for additional information. Goodwill and Indefinite-Lived Intangible Assets The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC No. 350, Intangibles—Goodwill and Other (“ASC 350”). ASC 350 requires goodwill and indefinite-lived intangible assets to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment. The Company evaluates goodwill at the end of the fourth quarter or more frequently if management believes indicators of impairment exist. Such indicators could includ e but are not limited to (1) changes in the Company’s business plans, (2) changing economic conditions including a potential decrease in the Company’s stock price and market capitalization, (3) a significant adverse change in legal factors or in business climate, (4) unanticipated competition, or (5) an adverse action or assessment by a regulator. In evaluating goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a quantitative goodwill impairment test. This impairment test involves comparing the fair value of the reporting unit with its carrying value (including goodwill). The Company estimates the fair values of its reporting unit using a combination of the income, or discounted cash flows approach and the market approach, which utilizes comparable companies’ data. If the estimated fair value of the reporting unit is less than its carrying value, a goodwill impairment exists for the reporting unit and an impairment loss is recorded. Based on the results of the Company’s interim and annual goodwill impairment tests, it determined it was more likely than not that goodwill was impaired at the Anthony's and the BurgerFi reporting units. Accordingly, the Company recorded goodwill impairment charges of approximately $66.6 million during the year ended January 2, 2023. Refer to Note 5, “ Impairment ,” for additional information. The estimated fair value of goodwill is subject to change as a result of many factors including, among others, any changes in the Company’s business plans, changing economic conditions, a potential decrease in its stock price and market capitalization, and the competitive environment. Should actual cash flows and the Company’s future estimates vary adversely from those estimates used, the Company may be required to recognize impairment charges in future years. The following table represents changes to the Company's goodwill during the year ended January 2, 2023 and December 31, 2021 : Reporting Unit (in thousands) BurgerFi Anthony's Total Goodwill Balance, December 31, 2020 $ 119,542 $ — $ 119,542 Goodwill acquired in connection with Anthony’s acquisition — 80,495 80,495 Adjustment to goodwill acquired 4,439 — 4,439 Impairment Loss (106,476) — (106,476) Balance, December 31, 2021 $ 17,505 $ 80,495 $ 98,000 Adjustment to goodwill acquired — 190 190 Impairment Loss (17,505) (49,064) (66,569) Balance January 2, 2023 $ — $ 31,621 $ 31,621 For details on the goodwill acquired in connection with the Anthony's acquisition, as well as the measurement period adjustment to goodwill (which related to other current liabilities) associated with the purchase price accounting for the Anthony’s acquisition, refer to Note 4, “ Acquisitions .” As it relates to impairment of goodwill, refer to Note 5, “ Impairment .” Indefinite-lived intangible assets are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. The annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not to be greater than the carrying amount. If the Company elects to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, it tests for impairment using a quantitative process. If the Company determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. The Company’s estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenue of corporate-owned and franchised restaurants and the resulting cash flows. The Company’s liquor licenses are considered to have an indefinite life with a value of $6.7 million for both years ended January 2, 2023 and December 31, 2021 and is included in intangible assets, net on our consolidated balance sheets. Refer to Note 3, “ Intangible Assets, ” for additional information. Deferred Financing Costs Deferred financing costs relate to the Company’s debt instruments, the short and long-term portions of which are reflected as deductions from the carrying amounts of the related debt instrument, including the Company’s Credit Agreement. Deferred financing costs are amortized over the terms of the related debt instruments using the effective interest method. For the years ended January 2, 2023 and December 31, 2021, the Company deferred $0.9 million and $1.0 million, respectively of financing costs in connection with its Credit Agreement. Amortization expense associated with deferred financing costs, which is included within interest expense, net, totaled $0.5 million for the year ended January 2, 2023 and $0.1 million for the year ended December 31, 2021. See Note 9, “ Debt ,” for additional information. Share-Based Compensation The Company has granted share-based compensation awards to certain employees under the 2020 Omnibus Equity Incentive Plan (the “Plan” ). The Company measures the cost of employee services received in exchange for an equity award, which may include grants of employee stock options and restricted stock units, based on the fair value of the award at the date of grant. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the requisite service period to the extent performance conditions are considered probable. Forfeitures are recognized as they occur. The Company will determine the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model” ). The grant date fair value of restricted stock unit awards ( “RSU Awards” ) and performance-based awards are determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document, unless the awards are subject to market conditions, in which case the Monte Carlo simulation model is used. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. Warrant Liability The Company has certain warrants which include provisions that affect the settlement amount. Such variables are outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging , with changes in fair value included in the consolidated statement of operations. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy is required to prioritize the inputs used to measure fair value. The three levels of the fair value hierarchy are described as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Restructuring Costs Restructuring costs for the year ended January 2, 2023 of $1.5 million included $0.8 million in severance costs and other termination benefits related to the departure of certain members of the leadership team notified prior to January 2, 2023 and $0.7 million in professional fees and other costs incurred in connection with the Company’s Credit Facility requirements to raise additional capital or debt. See Note 9, “ Debt ,” for further discussion of the Company’s credit facilities and indebtedness. The Company expects restructuring costs to be settled from operating cash flows within the next 12 months. Net Loss per Common Share Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company has considered the effect of (1) warrants outstanding to purchase 15,063,800 shares of common stock, (2) 75,000 shares of common stock and warrants to purchase 75,000 shares of common stock in the unit purchase option, (3) 1,495,600 shares of restricted stock unit grants in the calculation of income per share, and (4) the impact of any dividends associated with its redeemable preferred stock and they have not been included in the calculation of net loss per common share as it would be anti-dilutive. Reconciliation of Net Loss per Common Share Basic and diluted net loss per common share is calculated as follows: (in thousands, except for per share data) Year Ended January 2, 2023 Year Ended December 31, 2021 Numerator: Net loss available to common shareholders $ (103,432) $ (121,494) Reversal of gain on change in value of warrant liability $ — $ (12,619) Net loss available to common shareholders - diluted $ (103,432) $ (134,113) Denominator: Weighted-average shares outstanding 22,173,694 18,408,247 Effect of dilutive securities Warrants — 211,854 UPOs — 4,346 Diluted weighted-average shares outstanding 22,173,694 18,624,447 Basic net loss per common share $ (4.66) $ (6.60) Diluted net loss per common share $ (4.66) $ (7.20) For the year ended December 31, 2021, there were dilutive warrants and UPOs during the interim period, as such the reversal of the change in value of warrant liability is included for that period only to calculate the net loss available to common shareholders - diluted. The diluted weighted shares outstanding for the year ended December 31, 2021 represent the average dilutive warrant and UPOs share equivalents for the year ended December 31, 2021 including the impact of the dilutive warrants and UPOs share equivalents during the interim period for which the warrant and UPOs were dilutive. Concentration of Risk Management believes there is no concentration of risk with any single franchisee or small group of franchisees whose failure or nonperformance would materially affect the Company’s results of operations. The Company had no customers which accounted for 10% or more of consolidated revenue for the year ended January 2, 2023, or for the year ended December 31, 2021. As of January 2, 2023, the Company had two main in-line distributors of food, packaging and beverage products that provided approximately 80% of the Company's restaurants purchasing of those products in the U.S. We believe that the Company’s vulnerability to risk concentrations related to significant vendors and sources of its raw materials is mitigated as it believes that there are other vendors who would be able to service its requirements. However, if a disruption of service from any of its main in-line distributors was to occur, the Company could experience short-term increases in its costs while distribution channels were adjusted. The Company's restaurants are principally located throughout the United States. The Company has corporate-owned and franchised locations in 23 states, with the largest number in Florida. We believe the risk of geographic concentration is not significant. The Company could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of ingredients it sells or the effects of food safety events or disease outbreaks. The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from vendors for rebates, franchisees for royalties and franchise fees. This concentration of credit risk is mitigated, in part, by the number of franchisees and the short-term nature of the franchise receivables. Revenue Recognition Revenue consists of restaurant sales and franchise licensing revenue. Restaurant Revenue Revenue from restaurant sales is presented net of discounts and recognized when food, beverage and retail products are sold. Sales tax collected from customers is excluded from restaurant sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities. Revenue from restaurant sales is generally paid at the time of sale. Credit cards and delivery service partners sales are generally collected shortly after the sale occurs. The revenue from gift cards is included in unearned revenue when purchased by the customer and revenue is recognized when the gift cards are redeemed. Unearned revenues include liabilities established for the value of the gift cards when sold and are included in other current liabilities on the Company’s consolidated balance sheets. The Company estimates the amount of gift cards for which the likelihood of redemption is remote, referred to as “breakage,” using historical gift card redemption patterns. The estimated breakage is recognized over the expected period of redemption as the remaining gift card values are redeemed and is immaterial. If actual redemption patterns vary from these estimates, actual gift card breakage income may differ from the amounts recorded. Estimates of the redemption period and breakage rate applied are updated periodically. The Company contracts with delivery service partners for delivery of goods and services to customers. The Company has determined that the delivery service partners are agents, and the Company is the principal. Therefore, restaurant sales through delivery services are recognized at gross sales and delivery service commission is recorded as expense. Franchise Revenue The franchise agreements require the franchisee to pay an initial, non-refundable fee and continuing fees based upon a percentage of sales. Generally, payment for the initial franchise fee is received upon execution of the franchise agreement. Owners can make a deposit equal to 50% of the total franchise fee to reserve the right to open additional locations. The remaining balance of the franchise fee is due upon signing by the franchisee of the applicable location’s lease or mortgage. Franchise deposits received in advance for locations not expected to open within one year are classified as long-term liabilities, while franchise deposits received in advance for locations expected to open within one year are classified as short-term liabilities. Generally, the licenses granted to develop, open and operate each BurgerFi franchise in a specified territory are the predominant performance obligations transferred to the licensee in the Company’s contracts, and represent symbolic intellectual property. Certain initial services such as training, site selection and lease review are considered distinct services that are recognized at a point in time when the performance obligations have been provided, generally when the BurgerFi franchise has been opened. We determine the transaction price for each contract and allocate it to the distinct services based on the costs to provide the service and a profit margin. On an annual basis, the Company performs a review to reevaluate the amount of this initial franchise fee revenue that is recognized. The remainder of the transaction price is recognized over the remaining term of the franchise agreement once the BurgerFi restaurant has been opened. Because the Company transfers licenses to access its intellectual property during a contractual term, revenue is recognized on a straight-line basis over the license term. Franchise agreements and deposit agreements outline a schedule for store openings. Failure to meet the schedule can result in forfeiture of deposits made. Forfeiture of deposits is recognized as terminated franchise fee revenue once contracts have been terminated for failure to comply. All terminations are communicated to the franchisee in writing using formal termination letters. Additionally, a franchise store that is already open may terminate before its lease term has ended, in which case the remainder of the transaction price is recognized as terminated franchise fee revenue. Revenue from sales-based royalties (i.e. royalty and other fees, brand development and advertising co-op royalty) is recognized as the related sales occur. The sales-based royalties are invoiced and collected from the franchisees on a weekly basis. Rebates from vendors received on franchisee’s sales are also recognized as revenue from sales-based royalties. Contract Balances Opening and closing balances of contract liabilities and receivables from contracts with customers for the years ended January 2, 2023 and December 31, 2021 are as follows: (in thousands) Year Ended January 2, 2023 Year Ended December 31, 2021 Franchising receivables $ 168 $ 212 Gift card liability $ 1,847 $ 2,587 Unearned revenue, current $ 84 $ 468 Unearned revenue, long-term $ 1,008 $ 2,109 Franchise Revenue Revenue recognized during the years ended are as follows: (in thousands) Year Ended Year Ended December 31, 2021 Franchise Fees $ 1,806 $ 1,069 An analysis of unearned revenue is as follows: (in thousands) January 2, 2023 December 31, Balance, beginning of period $ 2,577 $ 3,306 Initial/Transfer franchise fees received 364 290 Revenue recognized for stores open and transfers during period (325) (235) Revenue recognized related to franchise agreement terminations (1,481) (834) Other unearned revenue (recognized) received (43) 50 Balance, end of period $ 1,092 $ 2,577 Presentation of Sales Taxes The Company collects sales tax from customers and remits the entire amount to the respective states. The Company’s accounting policy is to exclude the tax collected and remitted from revenue and cost of sales. Sales tax payable amounted to approximately $1.0 million and $1.1 million at January 2, 2023 and December 31, 2021, respectively, and is presented in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. Advertising Expenses Advertising costs are expensed as incurred. Advertising expense for the years ended January 2, 2023 and December 31, 2021 was $2.4 million and $0.9 million, respectively and are included in other operating expenses for specific store related advertising costs and brand development, co-op and advertising expense on the consolidated statements of operations. Anthony’s includes nine weeks of advertising costs in 2021 and a full year in 2022 as a result of the acquisition on November 3, 2021. Brand Development Royalties and Expenses The Company’s franchise agreements provide for franchisee contributions of a percentage of gross restaurant sales, which are recognized as royalty income. Amounts collected are required to be used for advertising and related costs, including reasonable costs of administration. For the year ended January 2, 2023, the Company had brand development royalties of approximately $1.4 million and brand development expenses of approximately $1.8 million. For the year ended December 31, 2021, the Company had brand development royalties of approximately $1.5 million and approximately $1.7 million of brand development expenses. Advertising Co-Op Royalties and Expenses The Company's South Florida franchises contribute a percentage of gross restaurant sales, which are recognized as royalty income. Amounts collected are required to be used for local advertising and related costs, including reasonable costs of administering the advertising program. For the year ended January 2, 2023, the Company had advertising co-op royalties of approximately $0.4 million and advertising co-op expenses of approximately $0.8 million. For the year ended December 31, 2021, the Company had advertising co-op royalties of approximately $0.5 million and approximately $0.8 million of advertising co-op expenses. Pre-opening Costs The Company follows ASC Topic |
Property & Equipment
Property & Equipment | 12 Months Ended |
Jan. 02, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property & Equipment | Property & Equipment Property & equipment consisted of the following: (in thousands) January 2, 2023 December 31, 2021 Leasehold improvements $ 17,029 $ 19,900 Kitchen equipment and other equipment 8,196 7,810 Computers and office equipment 1,468 1,425 Furniture and fixtures 2,677 2,340 Vehicles 37 88 29,407 31,563 Less: Accumulated depreciation and amortization (10,036) (2,528) Property & equipment – net $ 19,371 $ 29,035 Depreciation expense for the years ended January 2, 2023 and December 31, 2021 was $8.7 million and $2.5 million . The Company's long-lived assets are reviewed for impairment annually and whenever there are triggering events that require us to perform this review. The Company recorded $3.1 million and $0.6 million of property & equipment impairment during the years ended January 2, 2023 and December 31, 2021, respectfully. Refer to Note 5, “ Impairment, |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jan. 02, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The following is a summary of the components of intangible assets and the related amortization expense: January 2, 2023 December 31, 2021 (in thousands) Amount Accumulated Amortization Net Carrying Value Amount Accumulated Amortization Net Carrying Value Franchise agreements $ 24,839 $ 7,245 $ 17,594 $ 24,839 $ 3,696 $ 21,143 Trade names / trademarks 143,726 8,010 135,716 143,750 3,220 140,530 Liquor license 6,678 — 6,678 6,678 — 6,678 License agreement 1,176 1,063 113 1,176 925 251 VegeFi product 135 28 107 135 14 121 $ 176,554 $ 16,346 $ 160,208 $ 176,578 $ 7,855 $ 168,723 Liquor license is considered to have an indefinite life, and in addition to the Company's definite-lived intangible assets, is reviewed for impairment at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company recorded a $7.7 million impairment charge for the year ended December 31, 2021 , in relation to the Company's license agreement. No impairment charge was recorded for the year ended January 2, 2023 related to this license agreement. See Note 5 “ Impairment ,” for further information. Amortization expense for the years ended January 2, 2023 and December 31, 2021 was $8.5 million and $7.6 million, respectively. The estimated aggregate amortization expense for intangible assets over the next five years ending January 2 and thereafter is as follows: (in thousands) 2023 $ 8,467 2024 8,353 2025 8,353 2026 8,353 2027 8,204 Thereafter 111,800 Total $ 153,530 |
Acquisitions
Acquisitions | 12 Months Ended |
Jan. 02, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Acquisition of Hot Air, Inc. On November 3, 2021, the Company acquired 100% of the outstanding common shares and voting interest of Anthony's. The results of Anthony's operations have been included in the consolidated financial statements since that date. Anthony's, through its subsidiaries, owns and operates casual dining pizza restaurants under the trade name Anthony's Coal Fired Pizza & Wings. As of the acquisition date, Anthony's had 61 restaurants open and operational in Florida, Delaware, Pennsylvania, New Jersey, New York, Massachusetts, Maryland, and Rhode Island. The acquisition-date fair value of the consideration transferred totaled $75.9 million, which consisted of the following: Consideration Paid (in thousands) Common Stock $ 25,562 Preferred Stock 46,906 Option Consideration Shares 3,403 Total Consideration $ 75,871 The fair value of the common shares issued and option consideration shares was determined based on the closing market price of the Company’s common shares on the day preceding the acquisition date. The fair value of the preferred stock was determined using a discounted cash flow methodology. The expected future redemption payment was forecasted based on the contractual PIK (payment in kind) interest and estimated redemption date of December 31, 2024. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company determined the fair value of certain intangible assets. The measurement period for such purchase price allocations ended on November 3, 2022 or twelve months from the date of acquisition and the allocation below is final. (in thousands) Fair Value November 3, 2021 Cash $ 5,522 Accounts receivable 597 Inventory 986 Other current assets 1,662 Property & equipment 13,534 Intangible assets 67,344 Accounts payable, accrued expenses, and other current liabilities (15,451) Long-term borrowings (77,063) Deferred tax liability $ (1,755) Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed $ (4,624) Consideration paid 75,871 Goodwill $ 80,495 Of the $67.3 million of acquired intangible assets, $60.7 million was assigned to registered trademarks with a 30-year useful life and $6.6 million was assigned to acquired liquor licenses with an indefinite life. The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Anthony's. None of the goodwill is expected to be deductible for income tax purposes. The Company recognized $3.1 million of acquisition-related costs that were expensed in the year ended December 31, 2021. These costs are included in the consolidated statement of operations within general and administrative expenses. The Company also recognized $0.8 million in costs associated with issuing and registering the shares issued as consideration in the Anthony's acquisition during the year ended December 31, 2021. Those costs were deducted from the recognized proceeds of issuance within stockholders’ equity. During the year ended January 2, 2023, the Company adjusted its preliminary estimate of the fair value of net assets acquired by $0.2 millions. The adjustments to the preliminary estimate of net assets acquired resulted in a corresponding increase in estimated goodwill and include updates to estimates of provisional amounts recorded for certain accruals and receivables as of the Anthony's closing date. The amounts of revenue and net loss for Anthony's included in the Company’s consolidated statement of operations for the period from November 3, 2021, the acquisition date, through December 31, 2021 are as follows: (in thousands) 2021 Revenue $ 22,419 Net Loss (142) Proforma Information (Unaudited) The following represents the unaudited proforma consolidated statement of operations as if the Anthony's acquisition had been included in the consolidated results of the Company for the entire year ending December 31, 2021: (in thousands) Year Ended December 31, 2021 Revenue $ 168,906 Net Loss (138,490) These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Anthony's to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied on January 1, 2021, together with the consequential tax effects. |
Impairment
Impairment | 12 Months Ended |
Jan. 02, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment | Impairment The Company recognized a non-cash impairment charge of approximately $73.5 million during the year ended January 2, 2023 and $114.8 million for the year ended December 31, 2021. This consisted of the following: (in thousands) Year Ended January 2, 2023 Year Ended December 31, 2021 Goodwill $ 66,569 $ 106,476 Definite-lived intangible assets — 7,706 Long-lived assets 3,100 615 Right-of-use assets 3,846 — Total non-cash impairment charge $ 73,515 $ 114,797 Based on the results of the Company’s interim and annual goodwill impairment tests, the Company determined it was more likely than not that goodwill was impaired for the Anthony's and BurgerFi reporting units. Accordingly, for the BurgerFi reporting unit the Company recorded goodwill impairment charges of approximately $17.5 million and $106.5 million for the years ended January 2, 2023 and December 31, 2021. We also recognized impairment charges for Anthony’s reporting unit’s goodwill for the year ended January 2, 2023 of $49.1 million. The majority of the goodwill impairment was driven by the impact on the Company's market capitalization due to the decrease in stock price, coupled with significant declines to the equity values of its peers. Based on the Company’s review at the end of each reporting period of its long-lived assets and definite-lived intangible assets, it performed impairment testing for the related asset group for which there are independently identifiable cash flows. Based on its impairment testing, the Company determined that certain long-lived assets relating to its right-of-use assets, and property & equipment at certain corporate-owned restaurants were impaired at the BurgerFi and Anthony’s reporting units, and accordingly, the Company recorded impairment charges of approximately $6.9 million for the year ended January 2, 2023 . For the year ended December 31, 2021, the Company recorded impairment charges of approximately $7.7 million for the BurgerFi reporting unit and none for Anthony’s. The impairment amount was primarily the result of lower cash flow estimates associated with the licensing agreements, as well as a change in estimate of the related useful life. As it relates to determining the fair values of the assets impaired such as goodwill and definite lived intangible assets, refer to Note 13, “ Fair Value Measurements .” The Company utilized the income approach to fair value it’s long-lived and right-of-use assets and based on the weight of unobservable inputs classifies their fair value measurements as level 3 of the fair value hierarchy. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 02, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company is affiliated with various entities through common control and ownership. The accompanying consolidated balance sheets reflect amounts related to periodic advances between the Company and these entities for working capital and other needs as due from related companies or due to related companies, as appropriate. The amounts due from related companies are not expected to be repaid within one year and accordingly, are classified as non-current assets in the accompanying consolidated balance sheets. These advances are unsecured and non-interest bearing. There was approximately $0.3 million and a nominal amount due from related companies as of January 2, 2023 and December 31, 2021. For the years ended January 2, 2023 and December 31, 2021, the Company received royalty revenue from franchisees related to a significant shareholder totaling approximately $0.1 million and $0.3 million. The Company leases building space for its corporate office from an entity under common ownership with a significant shareholder. This lease had a 36-month term, effective January 1, 2020. For the years ended January 2, 2023 and December 31, 2021, rent expense was approximately $0.1 million and $0.2 million. In January 2022, the Company exercised its right to terminate this North Palm Beach lease effective as of July 2022. The Company leases building space for its new combined BurgerFi and Anthony’s corporate office from an entity controlled by Ophir Sternberg, its Executive Chairman. In February 2022, the Company amended the lease agreement to, among other things, (1) extend the term to ten years beginning March 1, 2022 expiring in 2032, and (2) expand its square footage from approximately 16,500 square feet to approximately 18,500 square feet. For the year ended January 2, 2023 rent expense was approximately $0.5 million. In addition, in April 2021, the Company entered into an independent contractor agreement with a company (the “Consultant” ) for which the Chief Operating Officer (the “ Consultant Principal ”) of Lionheart Capital, LLC, an entity controlled by Ophir Sternberg, the Executive Chairman of the Board, serves as President. Pursuant to the terms of the agreement, the Consultant Principal shall provide certain strategic advisory services to the Company in exchange for total annual cash compensation and expense reimbursements of $0.1 million, payable in twelve (12) equal monthly payments. For the years ended January 2, 2023 and December 31, 2021, the Consultant Principal received $0.1 million and a nominal amount of cash compensation and expense reimbursement for services provided in each year, respectively. In 2021, the Consultant Principal received an award of 50,000 restricted stock units, which shall vest in five On November 3, 2021, and as part of the Anthony's acquisition, the Company issued redeemable preferred stock and assumed certain liabilities, which were incurred from a related party and a significant shareholder. Refer to Note 8, “ Redeemable Preferred Stock ” and Note 9, “ Debt, |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 02, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Sale Commitment In February 2020, the Company entered into an asset purchase agreement with an unrelated third party for the sale of substantially all of the assets used in connection with the operation of BF Dania Beach, LLC for an aggregate purchase price of $1.3 million. During January to March 2020, the Company received three cash deposits totaling $0.9 million in connection with this transaction. The closing of this transaction has been delayed due to additional negotiation that has been ongoing. In the event the transaction is terminated, the Company would resume operating the restaurant, and return the $0.9 million to the unrelated third-party purchaser. Assets used in the operations of BF Dania Beach, LLC totaling $0.7 million have been classified as held for sale in the consolidated balance sheets as of January 2, 2023 and December 31, 2021. Contingencies Eric Gilbert v. BurgerFi International, Inc., Ophir Sternberg, et al. (Court of Chancery of the State of Delaware, Case No. 2022-0185- , filed on February 25, 2022). Mr. Gilbert filed a class action lawsuit against BurgerFi International, Inc. and each of the members of the Board of Directors alleging that the Company’s Amended and Restated Bylaws improperly contains a provision restricting written consents by the stockholders. Mr. Gilbert sought an amendment to the bylaws, as well as attorney’ fees and costs. On March 23, 2022, BurgerFi made conforming amendments to its bylaws to remove the provision restricting written consent by the stockholders. On March 24, 2022, the Court of Chancery entered a stipulated order pursuant to which plaintiff voluntarily dismissed the action with prejudice as to himself only. The Court of Chancery retained jurisdiction solely for the purpose of deciding the anticipated application of plaintiff’s counsel for an award of attorneys’ fees and reimbursement of expenses in connection with the corrective actions. The Company subsequently agreed to pay $150 thousand to plaintiff’s counsel for attorneys’ fees and expenses in full satisfaction of the claim for attorneys’ fees and expenses in the action and to finally settle the matter, which amount is included in accrued expenses in the accompanying consolidated balance sheets. Second 82nd SM, LLC v. BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. ( in the Supreme Court of the State of New York County of New York, having index No. 654907/2021 filed August 11, 2021). A lawsuit was filed by Second 82 nd SM, LLC (“ Landlord ”) against BF NY 82, LLC (“ Tenant ”) whereby Landlord brought a seven-count lawsuit for, among other things, breach of the lease agreement and underlying guaranty of the lease. The amount of damages Landlord is seeking approximately $1.5 million, which constitutes back rent, late charges, real estate taxes, illuminated sign charges and water/sewer charges. On November 3, 2021, the Company filed a Motion to Dismiss the Complaint. On November 17, 2021, the Tenant filed an Answer to Landlord’s Complaint and a cross claim against the Company, which the Company answered on December 7, 2021. On December 22, 2021, the Company filed its Response in Opposition to Landlord’s Motion for Summary Judgment and Memo in further Support of its Motion to Dismiss. The parties continue to discuss possible settlement, including turning over possession of the premises and payment of certain rent amounts to the Landlord. The Company is unable to predict the ultimate outcome of this matter, however, losses may be material to the Company’s financial position and results of operations. Lion Point Capital, L.P.(“Lion Point”) v. BurgerFi International, Inc. (Supreme Court of the State of New York County of New York, Index No. 653099/2022, filed August 26, 2022 . A lawsuit filed by Lion Point against the Company, alleging that the Company failed to timely register Lion Point’s shares in violation of the registration rights agreement to which Lion Point is a party, which allegedly resulted in losses in excess of $26 million. In November 2022, as amended in February 2023, the Company filed its answer to the complaint and continues to believe that all claims are meritless and plans to vigorously defend these allegations. Management is unable to determine the likelihood of a loss or range of loss, if any, which may result from the cases described above, therefore, no contingent liability has been recorded as of January 2, 2023; any losses, however, may be material to the Company's financial position and results of operations. John Rosatti, as Trustee of the John Rosatti Revocable Trust U/A/D 08/27/2001 (the "JR Trust") v. BurgerFi International, Inc. ( In the Circuit Court for the Eleventh Judicial Circuit, Florida, File No. 146578749 ). On March 28, 2022, the JR Trust filed a suit against BurgerFi alleging that the JR Trust suffered losses in excess of $10 million relating to BurgerFi’s alleged failure to timely file a registration rights agreement. The parties entered into a settlement agreement on January 11, 2023, whereby (i) the Company agreed to pay Mr. Rosatti $0.5 million in cash and issue him 200,000 shares of BFI common stock and, (ii) Mr. Rosatti agreed to transfer the assets and liabilities of the five former JR Trust stores to the Company. This settlement agreement, which the Company values on a net basis to be approximately $0.8 million of value transferred to Mr. Rosatti, resolved all remaining disputes between the parties, and Mr. Rosatti withdrew the related lawsuits against the Company. Burger Guys of Dania Pointe, et. al. v. BFI, LLC (Circuit Court of the 15 th Judicial Circuit in and for Palm Beach County, Florida, Case No. 50-2021-CA -006501-XXXX-MB filed May 21, 2021). In response to a demand letter issued by BurgerFi to Gino Gargiulo, a former franchisee, demanding that Mr. Gargiulo pay the balance owed under an asset purchase agreement wherein BurgerFi sold the Dania Beach, Florida BurgerFi location to Mr. Gargiulo, Mr. Gargiulo filed suit against BurgerFi claiming, in addition to other matters, that no further monies are owed under the asset purchase agreement and alleges that the Company is responsible for one of Mr. Gargiulo’s failed franchises in Sunny Isles, Florida, losses he has allegedly sustained at his Dania Beach location, and reimbursement of expenses in connection with his marketing company. Mr. Gargiulo seeks damages in excess of $2 million in the aggregate. The parties attended mediation on January 20, 2022, which ended in an impasse. Mr. Gargiulo amended his complaint in April 2022, which, among other matters, amended the defendant parties. In October 2022, the Company filed an additional motion to dismiss the amended complaint and a motion to stay discovery. In January 2023, Mr. Gargiulo filed a third amended complaint. In March 2023, the Company filed an answer to Mr. Gargiulo’s complaint and a counterclaim against Mr. Gargiulo relating to the breach of the asset purchase agreement discussed above. The matter is scheduled for trial in the second half of 2023. We believe that all Mr. Gargiulo claims are meritless, and the Company plans to vigorously defend these allegations. Management is unable to determine the likelihood of a loss or range of loss, if any, which may result from the cases described above, therefore, no contingent liability has been recorded as of January 2, 2023 ; any losses, however, may be material to the Company's financial position and results of operations. All Round Food Bakery Products, Inc. v. BurgerFi International, LLC and Neri’s Bakery Products, Inc. et al (Supreme Court Westchester County, New York (Index Number 52170-2020)). In a suit filed in February 2020, the plaintiff, All Round Food Bakery Products, Inc. ( “All Round Food” ) alleges breach of contract and lost profits in excess of $1 million over the course of the supply agreement with the Company and Neri’s Bakery Products, Inc. (“ Neri’s ” and together with the Company, the “Defendants” ). The Defendants assert, among other matters, that the supply agreement amongst the parties, whereby All Round Food was warehousing BurgerFi products produced by Neri’s, was terminated when All Round Food failed to cure its material breach of the supply agreement after due notice. The parties attended mediation to attempt to resolve the dispute, however, no resolution was reached. The parties have been ordered to attend an additional mediation on March 22, 2023. We believe that all claims are meritless, and the Company plans to vigorously defend these allegations. Management is unable to determine the likelihood of a loss or range of loss, if any, which may result from the cases described above, therefore, no contingent liability has been recorded as of January 2, 2023; any losses, however, may be material to the Company's financial position and results of operations. Employment Related Claims . In July 2021, the Company received a demand letter from the attorney of one of its now former hourly restaurant employees. The letter alleges that the former employee was sexually harassed by one of her co-workers. The demand letter claims that the Company discriminated and retaliated against the former employee based on her gender and age and also alleged intentional infliction of emotional distress, negligent hiring, negligent training, and negligent supervision. While the Company entered into a partial settlement with the former employee in December 2022 for a de minimus cash amount relating solely to the discrimination claim, the other claims remain. While the Company believes that all claims of the above mentioned Employment Related Claims, which are covered under the Company’s insurance policies, are meritless, and it plans to defend these allegations, it is reasonably possible that the Company may ultimately be required to pay substantial damages to the claimants, which could be up to $0.8 million or more in aggregate compensatory damages, attorneys’ fees and costs. Management believes that any liability, in excess of applicable insurance coverages or accruals, which may result from these claims, would not be significant to the Company’s financial position or results of operations. General Liability and Other Claims. The Company is subject to other legal proceedings and claims that arise during the normal course of business, including landlord disputes, slip and fall cases, and various food related matters. While it intends to vigorously defend these matters, it is reasonably possible that the Company may be required to pay substantial damages to the claimants. Management believes that any liability, in excess of applicable insurance coverages or accruals, which may result from these claims, would not be significant to the Company’s financial position or results of operations. Purchase Commitments From time to time, the Company enters into purchase commitments for food commodities in the normal course of business. As of January 2, 2023, it has entered into $3.1 million in conditional purchase obligations over the next 12 months. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 12 Months Ended |
Jan. 02, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Redeemable Preferred Stock | Redeemable Preferred Stock On November 3, 2021, and as part of the Anthony's acquisition, the Company issued 2,120,000 shares of redeemable preferred stock, par value $0.0001 per share, as Series A Preferred Stock (the "Series A Junior Preferred Stock" ). The Series A Junior Preferred Stock is redeemable on November 3, 2027 and accrues dividends at 7% per annum compounded quarterly from June 15, 2024 with such rate increasing by an additional 0.35% per quarter commencing with the three month period ending September 30, 2024 and (b) in the event that the Credit Facility is refinanced or repaid in full prior to June 15, 2024 and the Series A Junior Preferred Stock is not redeemed in full on such date, from and after such date, shall accrue dividends at 5% per annum, compounded quarterly, until June 15, 2024. As of January 2, 2023 and December 31, 2021, the value of the redeemable preferred stock was $51.4 million and $47.5 million, respectively and the principal redemption amount was $53.0 million. During the years ended January 2, 2023 and December 31, 2021, the Company recorded non-cash interest expense on the redeemable preferred stock in the amount of $3.9 million and $0.6 million respectively related to accretion of the preferred stock to its estimated redemption value. On February 24, 2023, the Company filed an amended and restated certificate of designation, (the “ A&R CoD ”), which among other matters, added a provision providing that in the event the Company fails to timely redeem any shares of Series A Preferred Stock on November 3, 2027, the applicable dividend rate shall automatically increase to the lesser of (A) the sum of 10% plus the 2% applicable default rate (with such aggregate rate increasing by an additional 0.35% per quarter from and after November 3, 2027), or (B) the maximum rate that may be applied under applicable law, unless waived in writing by a majority of the outstanding shares of Series A Junior Preferred Stock. The A&R CoD also added a provision providing that in the event the Company fails to timely redeem any shares of Series A Junior Preferred Stock in connection with a Qualified Financing (as defined in the A&R CoD) on November 3, 2027 (a “ Default ”), the Company agrees to promptly commence a debt or equity financing transaction or sale process to solicit proposals for the sale of the Company and its subsidiaries (or, alternatively, the sale of material assets) designed to yield the maximum cash proceeds to the Company available for redemption of the Series A Junior Preferred Stock as promptly as practicable, but in any event, within 12 months from the date of the Default. If on or after November 3, 2026, the Company is aware that it is reasonably unlikely to have sufficient cash to timely effect the redemption in full of the Series A Junior Preferred Stock when first due, the Company shall, prior to such anticipated due date, take reasonable steps to engage an investment banking firm of national standing (and other appropriate professionals) to conduct preparatory work for such a financing transaction and sale process of the Company and its subsidiaries to provide for such transaction to occur as promptly as possible after any failure for a timely redemption of the Series A Junior Preferred Stock. The Series A Junior Preferred Stock ranks senior to the Common Stock and may be redeemed at the option of the Company at any time and must be redeemed by the Company in limited circumstances. The Series A Junior Preferred Stock shall not have voting rights or conversion rights. For further discussion of the A&R CoD, including certain board and governance rights included in the A&R CoD, please see Part I, Item 1A Risk Factors “ We have significant stockholders whose interests may differ from those of our public stockholders .” and Part III, Item 10 Directors and Executive Officers. |
Debt
Debt | 12 Months Ended |
Jan. 02, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt (in thousands) January 2, December 31, Term loan $ 54,507 $ 57,761 Related party note payable 10,000 10,000 Revolving line of credit 4,000 2,500 Other notes payable 780 874 Finance lease liability 933 — Total Debt $ 70,220 $ 71,135 Less: Unamortized debt discount to related party note (765) (1,276) Less: Unamortized debt issuance costs (1,441) (1,007) Total Debt, net 68,014 68,852 Less: Short-term borrowings, including finance leases (4,985) (3,331) Total Long-term borrowings, including finance leases and related party note $ 63,029 $ 65,521 Credit Agreement On November 3, 2021, as further amended as described below and as part of the Anthony’s acquisition, the Company joined a credit agreement with a syndicate of commercial banks (as amended, the “Credit Agreement” ). The Credit Agreement, which was scheduled to terminate on June 15, 2024, provides the Company with lender financing structured as a $57.8 million term loan and a $4.0 million revolving loan. The terms of the Credit Agreement require the Company to repay the principal of the term loan in quarterly installments of approximately $0.8 million with the balance due at the maturity date. The principal amount of revolving loans is due and payable in full on the maturity date. The loan and revolving line of credit are secured by substantially all of the Company’s assets and incurred interest on outstanding amounts of 4.75% until December 31, 2022. Effective March 9, 2022, certain of the covenants of (i) the Company and Plastic Tripod, Inc., as the borrowers (the "Borrowers" ), and (ii) the subsidiary guarantors (the "Guarantors" ) party to the Credit Agreement were amended (such amendment herein referred to as the “ Twelfth Amendment ”). Pursuant to the terms of the Twelfth Amendment, the Borrowers and Guarantors agreed to pay incremental deferred interest of 2% per annum, in the event that the obligations under the Credit Agreement were not repaid on or prior to June 15, 2023; provided, however, that if no event of default has occurred and is continuing then (1) no incremental deferred interest will be due if all of the obligations under the Credit Agreement have been paid on or prior to December 31, 2022, and (2) only 50% of the incremental deferred interest will be owed if all of the obligations under the Credit Agreement have been paid from and after January 1, 2023 and on or prior to March 31, 2023. The Credit Agreement was further amended on December 7, 2022 (such amendment herein referred to as the “ Thirteenth Amendment”) by amending certain covenants of the Credit Agreement and extending the maturity date from June 15, 2024 to September 30, 2025. The amendment also provided for periodic increases to the annual rate of interest changing the rate per annum to (1) 5.75% from January 1, 2023 through June 15, 2023; (2) 6.75%per annum from June 16, 2023 through December 31, 2023; (3) 7.25% per annum from January 1, 2024 through June 15, 2024; and (4) 7.75% per annum from and after June 16, 2024 through maturity. In addition, the 2% incremental deferred interest implemented on March 9, 2022 was reduced to 1% beginning January 3, 2023 and will be eliminated at December 31, 2023. The terms of the Thirteenth Amendment also provided for a change in the timing of paying approximately $0.3 million of deferred interest payments previously scheduled to be paid on June 16, 2023 to be paid monthly from January to June 2023, while deferring the balance of deferred interest amount of approximately $1.3 million from June 15, 2023 to December 31, 2023. The Borrowers and Guarantors also agreed to obtain $5,000,000 in net cash proceeds from (x) a shelf registration and equity issuance by not later than January 2, 2023, or (y) issuance of unsecured subordinated debt by not later than January 30, 2023, referred to as the “ Initial New Capital Infusion Covenant ”. Under the terms of the Thirteenth Amendment, certain modifications were made to the accounting definitions in the Credit Agreement to bring such definitions in line with Company practices and needs. In addition, under the terms of the Thirteenth Amendment, the Borrowers and Guarantors agreed to reset their consolidated senior lease-adjusted leverage ratio and fixed charge coverage ratio as follows: (a) maintain a quarterly consolidated senior lease-adjusted leverage ratio greater than (i) 7.00to 1.00 as of the end of the fiscal quarter ending on or about December 31, 2022, (ii) 7.00 to 1.00 as of the end of the fiscal quarter ending on or about March 31, 2023, and (iii) 6.50 to 1.00 as of the end of the fiscal quarter ending on or about June 30, 2023 and the end of each fiscal quarter thereafter; (b) maintain a quarterly minimum fixed charge coverage ratio of 1.10 to 1.00 as of the end of the fiscal quarter ending on or about December 31, 2022 and the end of each fiscal quarter thereafter; and (c) the liquidity requirement of the Credit Agreement remains unchanged; provided, that in the event the Company has not received by January 2, 2023 at least $5,000,000 in net cash proceeds as a result of shelf registration and equity issuance then the required liquidity amount as of January 2, 2023 is reduced to $9,500,000. The consolidated senior lease-adjusted leverage ratio, fixed charge coverage ratio and liquidity are computed in accordance with the Credit Agreement. If upon delivery of the quarterly financial statements, the consolidated fixed charge coverage ratio as of the end of any fiscal quarter of the Company ending after January 2, 2023 was less than 1.15 to 1.00, then Borrowers and Guarantors agreed to engage a consulting firm to help with certain operational activities and other matters as reasonably determined by the lenders; provided, that, if after delivery of the quarterly financial statements, (x) the consolidated fixed charge coverage ratio as of the end of each of the two prior consecutive fiscal quarters of the Company was greater than 1.15 to 1.00, and (y) the consolidated senior lease-adjusted leverage ratio as of the end of each of the two prior consecutive fiscal quarters of the Company was less than the correlative amount of the consolidated senior lease-adjusted leverage ratio required for the financial covenants for such fiscal quarters by 0.25 basis points or more, then retention of the consulting firm shall not be required during the following fiscal quarter. The terms of the amended Credit Agreement require the Company to repay the principal of the term loan in quarterly installments with the balance due at the maturity date, as follows: in thousands 2023 $ 3,254 2024 3,254 2025 47,999 Total 54,507 The Delayed Draw Term Loan Facility is a non-interest bearing loan and accordingly was recorded at fair value as part of the Anthony’s acquisition which resulted in a debt discount of approximately $1.3 million which is being amortized over the period of the Delayed Draw Term Loan Facility. For the years ended January 2, 2023 and December 31, 2021, the Company recorded $0.5 million and $0.1 million, respectively as amortization of the debt discount which is included within interest expense in the accompanying consolidated statements of operations. The Company had $9.2 million outstanding under the Delayed Draw Term Loan Facility as of January 2, 2023 included in related party note payable in the consolidated balance sheets. On February 1, 2023, the Credit Agreement was further amended through the Fourteenth Amendment to amend the Initial New Capital Infusion Covenant to provide that, not later than February 24, 2023, the Company will obtain $5,000,000 of new indebtedness through the Initial New Capital Infusion, and exchange $10,000,000 of existing debt from delayed draw term loan, which was part of the Credit Agreement and provided by a related party and significant stockholder, for $10,000,000 in new junior subordinated secured debt, resulting in the Company holding $15,000,000 in junior subordinated secured debt on terms reasonably acceptable to the Required Lenders (as defined in the Credit Agreement),including , without limitation, that (1) such indebtedness shall not mature until at least two (2) years after the maturity date of the credit facility of September 30, 2025 ; (2) no payments of cash interest shall be made on such indebtedness until after the repayment in full of the obligations under the Credit Agreement; and (3) no scheduled or voluntary payments of principal shall be made until after the repayment in full of the obligations under the Credit Agreement. On February 24, 2023, the Credit Agreement was further amended through Fifteenth Amendment, whereby, the Borrowers and the Guarantors were released from liability with respect to the Delayed Draw Term Loan in the amount of $10,000,000 under the Credit Agreement (the “Existing Loan” ) in consideration of the continuation and amendment and restatement of the Existing Loan under the Note (as such term is defined below). The Company was in compliance with its financial covenants under the amended Credit Agreement as of January 2, 2023. On February 24, 2023, the Borrowers entered into the Note with Junior Lender, pursuant to which the Junior Lender continued, amended and restated the Existing Loan of $10,000,000, which is junior subordinated secured indebtedness, and also provided $5,100,000 of new junior subordinated secured indebtedness, to the Borrowers (collectively, the “ Junior Indebtedness ”), which Junior Indebtedness was incurred outside of the Credit Agreement. See also Part III, Item 13 Certain Relationships and Related Transactions, and Director Independence. The Junior Indebtedness, which accrues interest at 4% per annum (i) is secured by a second lien on substantially all of the assets of the Borrowers and the Guarantors pursuant to the terms of the Note and that certain Guaranty and Security Agreement, dated February 24, 2023, by and among the Guarantors and the Junior Lender, (ii) is subject to the terms of that certain Intercreditor and Subordination Agreement dated February 24, 2023, by and between the Administrative Agent and the Junior Lender and acknowledged by the Borrowers and the Guarantors, and (iii) matures on the date that is the second anniversary of the maturity date under the Credit Agreement (the “ Junior Maturity Date ”) (September 30, 2027, based on the maturity date under the Credit Agreement of September 30, 2025). Under the terms of the Note, no payments of cash interest or payments of principal shall be due until the Junior Maturity Date, and no voluntary prepayments may be made on the Junior Indebtedness prior to the Junior Maturity Date until after the repayment in full of the obligations under the Credit Agreement. The loan and revolving line of credit are secured by substantially all of the Company’s assets and incur interest on outstanding amounts at the following rates per annum through maturity: Time Period Interest Rate Through December 31, 2022 6.75 % From January 1, 2023 through June 15 2023 6.75 % From June 16, 2023 through December 31, 2023 6.75 % From January 1, 2024 through June 15, 2024 7.25 % From June 16, 2024 through maturity 7.75 % For the years ended January 2, 2023 and December 31, 2021, the Company deferred $0.9 million and $1.0 million respectively of financing costs in connection with Credit Agreement. Amortization expense associated with deferred financing costs, in the amounts of $0.5 million for the year ended January 2, 2023 and $0.1 million, for the year ended December 31, 2021 is included in interest expense in the accompanying consolidated statements of operations. Other Notes Payable Other notes payable relates to a note payable to an individual, issued in connection with the Company’s acquisition of a franchised restaurant, which requires monthly payments of $9,000 over a seven-year amortization, including 7% interest, with a maturity date of May 1, 2027. The other notes payable relates to an Economic Injury Disaster Loan from the Small Business Administration ( “SBA” ) and is primarily for one corporate-owned restaurant. PPP Loans On May 11, 2020, the Company received loan proceeds in the amount of $2.2 million under the Paycheck Protection Program ( “PPP” ). During the year ended December 31, 2021, all PPP loans amounting to $2.2 million were forgiven by the SBA. The SBA may undertake a review of a loan of any size during the six‐year period following forgiveness of the loan; however, loans in excess of $2 million are subject to a mandatory audit. The audit will include the loan forgiveness application, as well as whether the Company met the eligibility requirements of the PPP and received the proper loan amount. The timing and outcome of any SBA review is not known. |
Leases
Leases | 12 Months Ended |
Jan. 02, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into various lease agreements. For the years ended January 2, 2023 and December 31, 2021, rent expense was approximately $16.2 million and $5.2 million, respectively. The Company’s lease agreements expire on various dates through 2032 and have renewal options. On January 1, 2022, the Company adopted ASU 2016-02 . Results for reporting periods beginning on or after January 1, 2022 are presented under Accounting Standards Codification Topic 842 ( “ASC 842” ). Prior period amounts were not revised and continue to be reported in accordance with ASC Topic 840, the accounting standard then in effect. Upon transition, on January 1, 2022, the Company recorded the following increases (decreases) to the respective line items on the Condensed Consolidated Balance Sheet: (in thousands) Adjustment as of January 2, 2022 Prepaid expenses $ (773) Operating right-of-use asset, net 57,385 Finance right-of-use asset, net 855 Deferred rent (900) Short-term operating lease liability 9,457 Short-term finance lease liability 143 Long-term operating lease liability 49,149 Long-term finance lease liability 712 A summary of finance and operating lease right-of-use assets and liabilities as of January 2, 2023 is as follows: (in thousands) Classification Year Ended Operating leases Operating right-of-use asset, net $ 45,741 Finance leases Property & equipment, net 852 Total right-of-use assets $ 46,593 Operating leases: Short-term operating lease liability $ 9,924 Long-term operating lease liability 40,748 Finance leases: Short-term borrowings, including finance leases 150 Long-term borrowings, including finance leases 783 Total lease liabilities $ 51,604 The components of lease expense for the year ended January 2, 2023 is as follows: (in thousands) Classification Year Ended Operating lease cost Occupancy and related expenses $ 12,969 Operating lease impairment Asset impairment 3,846 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization expense 258 Interest on lease liabilities Interest expense 63 Less: Sublease income Occupancy and related expenses (194) Total lease cost $ 16,942 The maturity of the Company's operating and finance lease liabilities as of January 2, 2023 is as follows: (in thousands) Operating Leases Finance Leases 2023 $ 12,653 $ 200 2024 11,040 184 2025 9,544 170 2026 7,728 159 2027 6,318 152 2028 and thereafter 13,442 253 Total undiscounted lease payments 60,726 1,118 Less: present value adjustment (10,054) (185) Total net lease liabilities $ 50,672 $ 933 As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. A summary of lease terms and discount rates for finance and operating leases is as follows: Year Ended Weighted-average remaining lease term (in years): Operating leases 6.02 years Finance leases 6.30 years Weighted-average discount rate: Operating leases 6.0 % Finance leases 6.1 % |
Leases | Leases The Company has entered into various lease agreements. For the years ended January 2, 2023 and December 31, 2021, rent expense was approximately $16.2 million and $5.2 million, respectively. The Company’s lease agreements expire on various dates through 2032 and have renewal options. On January 1, 2022, the Company adopted ASU 2016-02 . Results for reporting periods beginning on or after January 1, 2022 are presented under Accounting Standards Codification Topic 842 ( “ASC 842” ). Prior period amounts were not revised and continue to be reported in accordance with ASC Topic 840, the accounting standard then in effect. Upon transition, on January 1, 2022, the Company recorded the following increases (decreases) to the respective line items on the Condensed Consolidated Balance Sheet: (in thousands) Adjustment as of January 2, 2022 Prepaid expenses $ (773) Operating right-of-use asset, net 57,385 Finance right-of-use asset, net 855 Deferred rent (900) Short-term operating lease liability 9,457 Short-term finance lease liability 143 Long-term operating lease liability 49,149 Long-term finance lease liability 712 A summary of finance and operating lease right-of-use assets and liabilities as of January 2, 2023 is as follows: (in thousands) Classification Year Ended Operating leases Operating right-of-use asset, net $ 45,741 Finance leases Property & equipment, net 852 Total right-of-use assets $ 46,593 Operating leases: Short-term operating lease liability $ 9,924 Long-term operating lease liability 40,748 Finance leases: Short-term borrowings, including finance leases 150 Long-term borrowings, including finance leases 783 Total lease liabilities $ 51,604 The components of lease expense for the year ended January 2, 2023 is as follows: (in thousands) Classification Year Ended Operating lease cost Occupancy and related expenses $ 12,969 Operating lease impairment Asset impairment 3,846 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization expense 258 Interest on lease liabilities Interest expense 63 Less: Sublease income Occupancy and related expenses (194) Total lease cost $ 16,942 The maturity of the Company's operating and finance lease liabilities as of January 2, 2023 is as follows: (in thousands) Operating Leases Finance Leases 2023 $ 12,653 $ 200 2024 11,040 184 2025 9,544 170 2026 7,728 159 2027 6,318 152 2028 and thereafter 13,442 253 Total undiscounted lease payments 60,726 1,118 Less: present value adjustment (10,054) (185) Total net lease liabilities $ 50,672 $ 933 As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. A summary of lease terms and discount rates for finance and operating leases is as follows: Year Ended Weighted-average remaining lease term (in years): Operating leases 6.02 years Finance leases 6.30 years Weighted-average discount rate: Operating leases 6.0 % Finance leases 6.1 % |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 02, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for (benefit) from income taxes is set forth below: (in thousands) January 2, 2023 December 31, 2021 Current: U.S. Federal $ — $ — State 35 — Total current income tax expense 35 — Deferred: U.S. Federal (10,002) (7,833) State (1,469) (2,192) Total deferred income tax benefit (11,471) (10,025) Valuation allowance 11,341 10,337 (130) 312 Income tax (benefit) expense $ (95) $ 312 The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to the Company’s effective tax rate is set forth below: (in thousands) January 2, 2023 December 31, 2021 Income tax provision at the U.S. federal statutory rate $ (21,741) $ (25,407) Permanent differences 870 402 Share-based compensation (463) 496 State income taxes, net of federal benefit (1,640) (1,888) Change in warrant liability (527) (2,900) Goodwill impairment 11,471 19,820 True-up 1,983 42 Change in valuation allowance 11,342 10,337 Change in rate (249) (406) Tax credits (1,141) (184) Total income tax (benefit) expense $ (95) $ 312 The components of the Company's deferred tax liabilities at January 2, 2023 and December 31, 2021 are set forth below: (in thousands) January 2, 2023 December 31, 2021 Deferred tax assets (liabilities): Allowance for doubtful accounts $ 40 $ 57 Goodwill 4,625 2,794 Fixed Assets 2,164 — Deferred franchise fees 277 684 Deferred rent — 239 Stock compensation 1,730 1,250 Net operating losses, Federal 13,649 11,215 Net operating losses, State 2,691 2,066 Deferred payroll taxes — 217 Interest expense 5,351 3,540 Lease liability 13,104 — Tax credits 1,854 713 Other 1,599 1,075 Gross deferred tax assets 47,084 23,850 Valuation allowance (22,629) (11,383) Net deferred tax assets 24,455 12,467 Intangible assets (13,878) (13,300) Lease ROU asset (11,800) — Fixed assets — (520) Deferred tax liabilities (25,678) (13,820) Total net deferred tax (liabilities) assets $ (1,223) $ (1,353) As of January 2, 2023, the Company’s federal net operating loss carryforwards for income tax purpos es was $64.9 million. On a tax-effected basis, the Company also had net operating losses of $2.7 million related to various state jurisdictions. $55.4 million of the federal net operating loss carryforwards will be carried forward indefinitely and will be av ailable to offset 80% of taxable income. The remaining amount of the federal net operating loss carryforwards will expire at varying dates through 2037. Pursuant to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, the utilization of net operating loss carryforwards and tax credits may be limited as a result of a cumulative change in stock ownership of more than 50% over a three year period. The Company underwent such a change and consequently, the utilization of a portion of the net operating loss carryforwards and tax credits is subject to certain limitations. In assessing the realizability of deferred income tax assets, ASC 740 requires that a more likely than not standard be met. If the Company determines that it is more likely than not that deferred income tax assets will not be realized, a valuation allowance must be established. The realization of deferred tax assets depends on the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies when making this determination. The Company has experienced cumulative losses in recent years which is significant negative evidence that is difficult to overcome in order to reach a determination that a valuation allowance is not required. Based on the Company's evaluation of its deferred tax assets, a valuation allowance of approximately $22.6 million has been recorded against the deferred tax asset. The following table summarizes the Company's unrecognized tax benefits at January 2, 2023 and December 31, 2021: (in thousands) January 2, 2023 December 31, 2021 Beginning balance $ 660 $ — Additions based on tax positions related to the current year — — Additions for tax positions of prior years — 660 Reductions for positions of prior years (431) — Ending balance $ 229 $ 660 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 02, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share. At January 2, 2023 and December 31, 2021, there were 22,257,772 shares and 21,303,500 shares of common stock outstanding, respectively. Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of January 2, 2023 and December 31, 2021 there were 2,120,000 shares of preferred stock outstanding. See Note 8, “ Redeemable Preferred Stock ,” for further information. Warrant s As of January 2, 2023 and December 31, 2021, the Company had the following warrants and options outstanding: 15,063,800 warrants outstanding, each exercisable for one share of common stock at an exercise price of $11.50 including 11,468,800 in Public Warrants, 3,000,000 in Private Placement Warrants, 445,000 in Private Warrants and 150,000 in Working Capital Warrants, 75,000 Unit Purchase Option “UPO” units that are exercisable for one share of common stock at an exercise price of $10.00 and warrants exercisable for one share of common stock at an exercise price of $11.50. The Public Warrants expire in December 2025. There were no warrants exercised during the year ended January 2, 2023. During the year ended December 31, 2021, the Company exchanged 675,000 UPO units for 283,669 common shares in a cashless exercise, issued 100 shares for warrants exercised in cash and issued 7,969 shares in cashless warrant exercises. The Public Warrants became exercisable 30 days after the completion of the BurgerFi acquisition, provided that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available. Warrant holders may, during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Company may redeem the Public Warrants: • in whole and not in part; • at a price of $0.01 per warrant; • at any time during the exercise period; • upon a minimum of 30 days' prior written notice of redemption; • if, and only if, the last sale price of the Company's common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders; and • if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants became transferable, assignable or salable after the completion of the BurgerFi acquisition, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Due to this provision, the Private Placement Warrants are accounted for as liabilities. The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the common stock issuable upon the exercise of the Private Warrants became transferable, assignable or salable after the completion of the BurgerFi acquisition, subject to certain limited exceptions. Additionally, the Private Warrants may be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Due to this provision, the Private Warrants are accounted for as liabilities. The Working Capital Warrants are identical to the Public Warrants, except that the Working Capital Warrants and the common stock issuable upon the exercise of the Working Capital Warrants became transferable, assignable or salable after the completion of the BurgerFi acquisition, subject to certain limited exceptions. Additionally, the Working Capital Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Working Capital Warrants are held by someone other than the initial purchasers or their permitted transferees, the Working Capital Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Due to this provision, the Working Capital Warrants are accounted for as liabilities. Unit Purchase Options The Company had an outstanding Unit Purchase Option Agreement with an investor, to purchase up to 750,000 Units (Units include 1 common share and 1 warrant per Unit) exercisable at $10.00 per Unit. The unit purchase option could have been exercised for cash or on a cashless basis, at the holder’s option, however, it expired on on March 17, 2023 without being exercised. There were no UPO exchanges during the year ended January 2, 2023. During the year ended December 31, 2021, the Company exchanged 675,000 UPO units for 283,669 common shares in a cashless exercise and issued 7,969 shares in cashless warrant exercises. Share-Based Compensation The Company has the ability to grant stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and performance compensation awards to current or prospective employees, directors, officers, consultants or advisors under the Plan. The Plan was established to benefit the Company and its stockholders, by assisting the Company to attract, retain and provide incentives to key management employees, directors, and consultants of the Company, and to align the interests of such service providers with those of the Company’s stockholders. Accordingly, the Plan provides for the granting of Non-qualified Stock Options, Incentive Stock Options, Restricted Stock Unit Awards, Restricted Stock Awards, Stock Appreciation Rights, Performance Stock Awards, Performance Unit Awards, Unrestricted Stock Awards, Distribution Equivalent Rights or any combination of the foregoing. The initial aggregate number of Shares that may be issued under the Plan shall not exceed Two Million (2,000,000) Shares. The aggregate number of Shares reserved for Awards under the Plan (other than Incentive Stock Options) shall automatically increase on January 1 of each year, for a period of not more than ten (10) years, commencing on January 1 of the year following the year after the date the Plan became effective in an amount equal to five percent (5%) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, provided that the Committee may determine prior to the first day of the applicable fiscal year to lower the amount of such annual increase. On January 3, 2022, the Company filed a Registration Statement with the SEC to register 1,065,175 additional shares of common stock, $0.0001 par value per share, of the Company under the Plan, pursuant to the “evergreen” provision of the Plan providing for an automatic increase in the number of shares reserved for issuance under the Plan. On January 5, 2023, the Company filed a Registration Statement with the SEC to register 1,112,889 additional shares of common stock, $0.0001 par value per share, of the Company under the Plan, pursuant to the “evergreen” provision of the Plan providing for an automatic increase in the number of shares reserved for issuance under the Plan. As of January 2, 2023 and December 31, 2021, there were approximately 600,000 and 126,000 shares of common stock available for future grants under the 2020 Plan, respectively. Restricted Stock Unit Awards The Company grants RSU Awards with service, performance and market conditions. The RSU Awards granted with service conditions generally vest over 4 years. The market conditions include an index to the market value of the stock price of BurgerFi, and the performance conditions are based on key performance indicators, as identified in the grant agreements. The fair value of restricted stock units granted is determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document. The following table summarizes activity of restricted stock units during the year ended January 2, 2023: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2021 1,783,698 $ 14.18 Granted 587,847 4.55 Vested (477,799) 13.08 Forfeited (448,146) 10.85 Non-vested at January 2, 2023 1,445,600 $ 11.68 Share-based compensation recognized during the year ended January 2, 2023 was approximately $10.2 million, inclusive of restricted stock unit grants of $6.4 million and stock grants of $3.9 million. Share-based compensation recognized during the year ended December 31, 2021 was approximately $7.6 million, comprised of restricted stock unit grants. As of January 2, 2023, there was approximately $11.9 million of total unrecognized compensation cost related to unvested restricted stock units or performance-based restricted stock unit awards to be recognized over a weighted average period of 1.3 to 2.8 years. The unrecognized portion of share-based compensation for unvested market condition restricted stock units (included in above) is approximately $0.5 million over 1.28 years. As detailed below, the fair value of the market condition restricted stock units was determined using a Monte Carlo simulation model. Performance-Based Restricted Stock Unit Awards The Company grants performance-based awards (restricted stock units) to certain officers and key employees. The vesting of these awards is contingent upon meeting one or more defined operational or financial goals (a performance condition) or common stock share prices (a market condition) or employment conditions. The fair values of the performance condition awards granted were determined using the fair market value of the Company’s common stock on the date of grant. Share-based compensation expense recorded for performance condition awards is reevaluated at each reporting period based on the probability of the achievement of the goal. Certain goals were achieved as of January 2, 2023. Accordingly, the Company recognized share-based compensation expense of approximately $3.7 million in relation to these awards during the year ended January 2, 2023 and $4.6 million during the year ended December 31, 2021. The fair value of market condition awards granted were estimated using the Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that the market conditions will be achieved and is applied to the trading price of the Company’s common stock on the date of grant. In January 2022 and July 2021, the Company modified the terms related to certain market condition awards that the Compensation Committee previously approved. As a result of these modifications, the Company recorded additional share-based compensation of $0.2 million during the year ended January 2, 2023 and $0.1 million for the year ended December 31, 2021 for these modifications. The input variables are noted in the table below: Year Ended Year Ended Risk-free interest rate 0.4% - 4.1% 1.03 % Expected life in years 2.0 years 3.0 years Expected volatility 57.3% - 65.9% 65.9 % Expected dividend yield * 0 % 0 % * The Monte Carlo method assumes a reinvestment of dividends. Share-based compensation expense is recorded ratably for market condition awards during the requisite derived service period and is not reversed, except for forfeitures, at the vesting date regardless of whether the market condition is met. During the years ended January 2, 2023 and December 31, 2021, $0.6 million and $1.5 million, respectively, was recognized ratably as share-based compensation expense for the market condition awards. Service-Based Restricted Stock Unit Awards The Company grants service-based awards (restricted stock units) to certain officers and key employees. The vesting of these awards is contingent upon meeting the requisite service period. The fair value of restricted stock unit awards is determined using the publicly-traded price of its common stock on the grant date. During the years ended January 2, 2023 and December 31, 2021, $2.1 million and $1.3 million, respectively, was recognized ratably as share-based compensation expense for the service-based awards. The following table summarizes activity of the restricted stock units during the year ended January 2, 2023: Performance Condition Service Condition Market Condition Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2021 1,251,698 $ 15.15 252,000 $ 15.79 280,000 $ 8.42 Granted 282,000 4.12 115,847 6.26 190,000 4.13 Vested (241,952) 15.14 (205,847) 11.33 (30,000) 8.41 Forfeited (240,646) 13.14 — — (207,500) 8.20 Non-vested at January 2, 2023 1,051,100 $ 12.62 162,000 $ 14.65 232,500 $ 5.34 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 02, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair values of financial instruments are estimated using public market prices, quotes from financial institutions, and other available information. The fair values of cash equivalents, receivables, net, accounts payable and short-term debt approximate their carrying amounts due to their short duration. The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of January 2, 2023 and December 31, 2021. Items Measured at Fair Value at January 2, 2023 (in thousands) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Warrant liability — 195 — Total $ — $ 195 $ — Items Measured at Fair Value at December 31, 2021 (in thousands) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Warrant liability — 2,706 Total $ — $ — $ 2,706 The fair value of non-financial assets measured at fair value on a non-recurring basis, classified as Level 3 in the fair value hierarchy, is determined based on the income approach or third-party market appraisals. In estimating our fair value disclosures for financial instruments, we use the following methods and assumptions: Cash and cash equivalents: The carrying amount reported in the Consolidated Balance Sheets for these items approximates fair value due to their liquid nature. Accounts receivable, inventory, other current assets, accounts payable, accrued expenses and other current liabilities: The carrying value reported on the consolidated balance sheets for these items approximates their fair value, which is the likely amount for which the receivable or liability with short settlement periods would be transferred from/to a market participant with a similar credit standing as the Company’s. Long-term borrowings: The fair value of the Company’s long-term borrowings under the Credit Agreement approximates $53.2 million and it’s carrying value was $58.5 million. The fair value is estimated using Level 2 inputs based on quoted prices for those or similar instruments. Refer to Note 9, “ Debt ,”for further discussion. The fair value of the Company warrant liability is measured at fair value on a recurring basis, classified as Level 2 in the fair value hierarchy. The fair value of the private placement warrants, private warrants, and working capital warrants are determined using the publicly-traded price of its common stock on the valuation dates of $1.26 on January 2, 2023 and $5.67 on December 31, 2021. The fair value is calculated using the Black-Scholes option-pricing model. The Black-Scholes model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility, risk-free interest rate, dividend rate and service period. The calculated warrant price for private warrants was $0.05 and $0.75 on January 2, 2023 and December 31, 2021. The input variables for the Black-Scholes are noted in the table below: January 2, 2023 December 31, 2021 Risk-free interest rate 4.14 % 1.11 % Expected life in years 3.0 years 3.96 years Expected volatility 68.0 % 41.8 % Expected dividend yield 0 % 0 % |
Segment Information
Segment Information | 12 Months Ended |
Jan. 02, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Prior to the Anthony's acquisition in November 2021, the Company had one operating and reportable segment. Following the Anthony's acquisition, the Company has two operating and reportable segments: • BurgerFi, which includes operations of corporate-owned and franchised BurgerFi restaurants, which offer a fast-casual “better burger” concept; and • Anthony's, which includes operations of casual dining pizza restaurants under the name Anthony’s Coal Fired Pizza & Wings. The CODM includes the CEO, CFO, and Executive Chairman as they assess the performance of the reportable segments and make all the significant strategic decisions, including the allocation of resources. External sales are derived principally from food and beverage sales, royalty and franchise revenue. The Company does not rely on any major customers as a source of sales, and the customers and long-lived assets of its reportable segments are predominantly in the U.S. There were no material transactions among reportable segments. The following tables present revenue, capital expenditures, depreciation and amortization, pre-opening costs, interest expense and net loss by segment: (in thousands) Year Ended January 2, 2023 Year Ended December 31, 2021 Revenue: BurgerFi $ 49,901 $ 46,448 Anthony's* 128,819 22,419 Total $ 178,720 $ 68,867 Capital expenditures: BurgerFi $ 1,428 $ 10,348 Anthony's* 1,090 317 Total $ 2,517 $ 10,665 Depreciation and amortization: BurgerFi $ 9,571 $ 8,694 Anthony's 7,567 1,366 Total $ 17,138 $ 10,060 Pre-opening costs: BurgerFi $ 474 $ 1,905 Anthony's — — Total $ 474 $ 1,905 Interest expense: BurgerFi $ 3,843 $ 673 Anthony's 4,816 733 Total $ 8,659 $ 1,406 Net loss: BurgerFi $ (50,375) $ (121,352) Anthony's* (53,057) (142) Total $ (103,432) $ (121,494) * Amounts for Anthony's are only presented from November 3, 2021, the date of acquisition. Total assets by segment are as follows: (in thousands) Year Ended January 2, 2023 Year Ended December 31, 2021 Total assets: BurgerFi $ 136,811 $ 161,675 Anthony's 139,969 156,044 Total $ 276,780 $ 317,719 |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 02, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America ( “GAAP” ) and the rules and regulations of the Securities and Exchange Commission ( “SEC” ) assuming the Company will continue as a going concern. T he going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, during the third quarter of 2022, substantial doubt about the Company’s ability to continue as a going concern was raised due to uncertainty surrounding the Company’s ability to comply with its forecasted financial covenants. The going concern uncertainty was cured by the Credit Agreement, as amended on February 24, 2023. See Note 9, “ Debt ,” for additional disclosure surrounding the amended Credit Agreement. On November 3, 2021, the Company completed the acquisition of Hot Air, Inc. (the "Anthony's acquisition" ), which through its subsidiaries, owns and operates casual dining pizza restaurants under the trade name Anthony’s Coal Fired Pizza & Wings ( "Anthony's" ). The results of operations, financial position and cash flows of Anthony's is included in its consolidated financial statements as of the closing date of the acquisition. |
Fiscal period | On July 28, 2022, the Company's Board of Directors approved the change to a 52-53-week fiscal year ending on the Monday nearest to December 31 of each year in order to improve the alignment of financial and business processes following the acquisition of Anthony’s. With this change, the Company’s fiscal year 2022 ended on January 2, 2023. For the year ended December 31, 2021, the BurgerFi brand operated on a calendar year-end and Anthony's operated on a 52-53 week fiscal year ended on the Monday closest to December 31. Differences arising from the different fiscal year-ends were not deemed material for the year ended December 31, 2021. |
Reclassifications | Reclassifications Certain current year amounts primarily in restaurant level operating expenses, general and administrative expenses and brand development, co-op and advertising expense have been reclassified within the consolidated statements of operations and are not comparable to the year ended December 31, 2021. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements present the consolidated financial position, results from operations and cash flows of BurgerFi International, Inc., and its wholly owned subsidiaries. All material balances and transactions between the entities have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less as cash equivalents. Cash and cash equivalents also include approximately $2.4 million and $1.1 million as of January 2, 2023 and December 31, 2021, respectively, of amounts due from commercial credit card companies, such as Visa, MasterCard, Discover, and American Express, which are generally received within a few days of the related transactions. At times, the balances in the cash and cash equivalents accounts may exceed federal insured limits. The Federal Deposit Insurance Corporation insures eligible accounts up to $250,000 per depositor at each financial institution. The Company limits uninsured balances to only large, well-known financial institutions and believes that it is not exposed to significant credit risk on cash and cash equivalents. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable consist of amounts due from vendors for rebates on purchases of goods and materials, franchisees for training and royalties and are stated at the amount invoiced. Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Management provides for probable uncollectible amounts through a charge to earnings and a credit to allowance for uncollectible accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for uncollectible accounts and a credit to accounts receivable. The allowance for uncollectible accounts was approximately $0.2 million at January 2, 2023, and nominal at December 31, 2021. |
Inventories | Inventories Inventories primarily consist of food and beverages. Inventories are accounted for at lower of cost or net realizable value using the first-in, first-out (FIFO) method. Spoilage is expensed as incurred. |
Property & Equipment, net | Property & Equipment, net Property & equipment are carried at cost, net of accumulated depreciation. Depreciation is provided by the straight-line method over an estimated useful life. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful life of the asset and the term of the related lease. The estimated lives for kitchen equipment and other equipment, computers and office equipment, furniture and fixtures, and vehicles range from five |
Impairment of Long-Lived Assets and Definite-Lived Intangible Assets | Impairment of Long-Lived Assets and Definite-Lived Intangible Assets The Company assesses the potential impairment of its long-lived assets on an annual basis or whenever events or changes in circumstances indicate the carrying value of the assets or asset group may not be recoverable. Factors considered include, but are not limited to, negative cash flow, significant underperformance relative to historical or projected future operating results, significant changes in the manner in which an asset is being used, an expectation that an asset will be disposed of significantly before the end of its previously estimated useful life and significant negative industry or economic trends. At any given time, the Company may be monitoring a small number of locations, and future impairment charges could be required if individual restaurant performance does not improve or if the decision is made to close or relocate a restaurant. If such assets are considered to be impaired, the impairment to be recognized is measured at the amount by which the carrying amount of the assets exceeds the fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles: 7 years for franchise agreements, 30 years for trade names, 10 years for the license agreement (adjusted to 22 months at December 31, 2021), and 10 years for the VegeFi product. Right of use assets are amortized based on the expected remaining term of the lease agreement which can range from 5 to 10 years at inception of the lease or renewal term. Refer to leases below for discussion of amortization of right of use assets. The Company reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC No. 350, Intangibles—Goodwill and Other (“ASC 350”). ASC 350 requires goodwill and indefinite-lived intangible assets to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment. The Company evaluates goodwill at the end of the fourth quarter or more frequently if management believes indicators of impairment exist. Such indicators could includ e but are not limited to (1) changes in the Company’s business plans, (2) changing economic conditions including a potential decrease in the Company’s stock price and market capitalization, (3) a significant adverse change in legal factors or in business climate, (4) unanticipated competition, or (5) an adverse action or assessment by a regulator. In evaluating goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a quantitative goodwill impairment test. This impairment test involves comparing the fair value of the reporting unit with its carrying value (including goodwill). The Company estimates the fair values of its reporting unit using a combination of the income, or discounted cash flows approach and the market approach, which utilizes comparable companies’ data. If the estimated fair value of the reporting unit is less than its carrying value, a goodwill impairment exists for the reporting unit and an impairment loss is recorded. Based on the results of the Company’s interim and annual goodwill impairment tests, it determined it was more likely than not that goodwill was impaired at the Anthony's and the BurgerFi reporting units. Accordingly, the Company recorded goodwill impairment charges of approximately $66.6 million during the year ended January 2, 2023. Refer to Note 5, “ Impairment ,” for additional information. The estimated fair value of goodwill is subject to change as a result of many factors including, among others, any changes in the Company’s business plans, changing economic conditions, a potential decrease in its stock price and market capitalization, and the competitive environment. Should actual cash flows and the Company’s future estimates vary adversely from those estimates used, the Company may be required to recognize impairment charges in future years. |
Deferred Financing Costs | Deferred Financing CostsDeferred financing costs relate to the Company’s debt instruments, the short and long-term portions of which are reflected as deductions from the carrying amounts of the related debt instrument, including the Company’s Credit Agreement. Deferred financing costs are amortized over the terms of the related debt instruments using the effective interest method. For the years ended January 2, 2023 and December 31, 2021, the Company deferred $0.9 million and $1.0 million, respectively of financing costs in connection with its Credit Agreement. Amortization expense associated with deferred financing costs, which is included within interest expense, net, totaled $0.5 million for the year ended January 2, 2023 and $0.1 million for the year ended December 31, 2021. |
Share-Based Compensation | Share-Based Compensation The Company has granted share-based compensation awards to certain employees under the 2020 Omnibus Equity Incentive Plan (the “Plan” ). The Company measures the cost of employee services received in exchange for an equity award, which may include grants of employee stock options and restricted stock units, based on the fair value of the award at the date of grant. The Company recognizes share-based compensation expense over the requisite service period unless the awards are subject to performance conditions, in which case the Company recognizes compensation expense over the requisite service period to the extent performance conditions are considered probable. Forfeitures are recognized as they occur. The Company will determine the grant date fair value of stock options using a Black-Scholes-Merton option pricing model (the “Black-Scholes Model” ). The grant date fair value of restricted stock unit awards ( “RSU Awards” ) and performance-based awards are determined using the fair market value of the Company’s common stock on the date of grant, as set forth in the applicable plan document, unless the awards are subject to market conditions, in which case the Monte Carlo simulation model is used. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that market conditions will be achieved. |
Warrant Liability | Warrant Liability The Company has certain warrants which include provisions that affect the settlement amount. Such variables are outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging , with changes in fair value included in the consolidated statement of operations. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy is required to prioritize the inputs used to measure fair value. The three levels of the fair value hierarchy are described as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
Net (Loss) Income per Common Share | Net Loss per Common Share Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. The Company has considered the effect of (1) warrants outstanding to purchase 15,063,800 shares of common stock, (2) 75,000 shares of common stock and warrants to purchase 75,000 shares of common stock in the unit purchase option, (3) 1,495,600 shares of restricted stock unit grants in the calculation of income per share, and (4) the impact of any dividends associated with its redeemable preferred stock and they have not been included in the calculation of net loss per common share as it would be anti-dilutive. |
Reconciliation of Net (Loss) Income Per Common Share | Reconciliation of Net Loss per Common Share Basic and diluted net loss per common share is calculated as follows: (in thousands, except for per share data) Year Ended January 2, 2023 Year Ended December 31, 2021 Numerator: Net loss available to common shareholders $ (103,432) $ (121,494) Reversal of gain on change in value of warrant liability $ — $ (12,619) Net loss available to common shareholders - diluted $ (103,432) $ (134,113) Denominator: Weighted-average shares outstanding 22,173,694 18,408,247 Effect of dilutive securities Warrants — 211,854 UPOs — 4,346 Diluted weighted-average shares outstanding 22,173,694 18,624,447 Basic net loss per common share $ (4.66) $ (6.60) Diluted net loss per common share $ (4.66) $ (7.20) |
Concentration of Risk | Concentration of Risk Management believes there is no concentration of risk with any single franchisee or small group of franchisees whose failure or nonperformance would materially affect the Company’s results of operations. The Company had no customers which accounted for 10% or more of consolidated revenue for the year ended January 2, 2023, or for the year ended December 31, 2021. As of January 2, 2023, the Company had two main in-line distributors of food, packaging and beverage products that provided approximately 80% of the Company's restaurants purchasing of those products in the U.S. We believe that the Company’s vulnerability to risk concentrations related to significant vendors and sources of its raw materials is mitigated as it believes that there are other vendors who would be able to service its requirements. However, if a disruption of service from any of its main in-line distributors was to occur, the Company could experience short-term increases in its costs while distribution channels were adjusted. The Company's restaurants are principally located throughout the United States. The Company has corporate-owned and franchised locations in 23 states, with the largest number in Florida. We believe the risk of geographic concentration is not significant. The Company could be adversely affected by changing consumer preferences resulting from concerns over nutritional or safety aspects of ingredients it sells or the effects of food safety events or disease outbreaks. The Company is subject to credit risk through its accounts receivable consisting primarily of amounts due from vendors for rebates, franchisees for royalties and franchise fees. This concentration of credit risk is mitigated, in part, by the number of franchisees and the short-term nature of the franchise receivables. |
Revenue Recognition | Revenue Recognition Revenue consists of restaurant sales and franchise licensing revenue. Restaurant Revenue Revenue from restaurant sales is presented net of discounts and recognized when food, beverage and retail products are sold. Sales tax collected from customers is excluded from restaurant sales and the obligation is included in sales tax payable until the taxes are remitted to the appropriate taxing authorities. Revenue from restaurant sales is generally paid at the time of sale. Credit cards and delivery service partners sales are generally collected shortly after the sale occurs. The revenue from gift cards is included in unearned revenue when purchased by the customer and revenue is recognized when the gift cards are redeemed. Unearned revenues include liabilities established for the value of the gift cards when sold and are included in other current liabilities on the Company’s consolidated balance sheets. The Company estimates the amount of gift cards for which the likelihood of redemption is remote, referred to as “breakage,” using historical gift card redemption patterns. The estimated breakage is recognized over the expected period of redemption as the remaining gift card values are redeemed and is immaterial. If actual redemption patterns vary from these estimates, actual gift card breakage income may differ from the amounts recorded. Estimates of the redemption period and breakage rate applied are updated periodically. The Company contracts with delivery service partners for delivery of goods and services to customers. The Company has determined that the delivery service partners are agents, and the Company is the principal. Therefore, restaurant sales through delivery services are recognized at gross sales and delivery service commission is recorded as expense. Franchise Revenue The franchise agreements require the franchisee to pay an initial, non-refundable fee and continuing fees based upon a percentage of sales. Generally, payment for the initial franchise fee is received upon execution of the franchise agreement. Owners can make a deposit equal to 50% of the total franchise fee to reserve the right to open additional locations. The remaining balance of the franchise fee is due upon signing by the franchisee of the applicable location’s lease or mortgage. Franchise deposits received in advance for locations not expected to open within one year are classified as long-term liabilities, while franchise deposits received in advance for locations expected to open within one year are classified as short-term liabilities. Generally, the licenses granted to develop, open and operate each BurgerFi franchise in a specified territory are the predominant performance obligations transferred to the licensee in the Company’s contracts, and represent symbolic intellectual property. Certain initial services such as training, site selection and lease review are considered distinct services that are recognized at a point in time when the performance obligations have been provided, generally when the BurgerFi franchise has been opened. We determine the transaction price for each contract and allocate it to the distinct services based on the costs to provide the service and a profit margin. On an annual basis, the Company performs a review to reevaluate the amount of this initial franchise fee revenue that is recognized. The remainder of the transaction price is recognized over the remaining term of the franchise agreement once the BurgerFi restaurant has been opened. Because the Company transfers licenses to access its intellectual property during a contractual term, revenue is recognized on a straight-line basis over the license term. Franchise agreements and deposit agreements outline a schedule for store openings. Failure to meet the schedule can result in forfeiture of deposits made. Forfeiture of deposits is recognized as terminated franchise fee revenue once contracts have been terminated for failure to comply. All terminations are communicated to the franchisee in writing using formal termination letters. Additionally, a franchise store that is already open may terminate before its lease term has ended, in which case the remainder of the transaction price is recognized as terminated franchise fee revenue. |
Presentation of Sales Taxes | Presentation of Sales Taxes The Company collects sales tax from customers and remits the entire amount to the respective states. The Company’s accounting policy is to exclude the tax collected and remitted from revenue and cost of sales. Sales tax payable amounted to approximately $1.0 million and $1.1 million at January 2, 2023 and December 31, 2021, respectively, and is presented in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. |
Advertising Expenses | Advertising Expenses Advertising costs are expensed as incurred. Advertising expense for the years ended January 2, 2023 and December 31, 2021 was $2.4 million and $0.9 million, respectively and are included in other operating expenses for specific store related advertising costs and brand development, co-op and advertising expense on the consolidated statements of operations. Anthony’s includes nine weeks of advertising costs in 2021 and a full year in 2022 as a result of the acquisition on November 3, 2021. |
Brand Development Fund | Brand Development Royalties and ExpensesThe Company’s franchise agreements provide for franchisee contributions of a percentage of gross restaurant sales, which are recognized as royalty income. Amounts collected are required to be used for advertising and related costs, including reasonable costs of administration. |
Advertising Co-Op Fund | Advertising Co-Op Royalties and ExpensesThe Company's South Florida franchises contribute a percentage of gross restaurant sales, which are recognized as royalty income. Amounts collected are required to be used for local advertising and related costs, including reasonable costs of administering the advertising program. |
Pre-opening Costs | Pre-opening Costs The Company follows ASC Topic 720-15, “ Start-up Costs,” which provides guidance on the financial reporting of start-up costs and organization costs. In accordance with this ASC Topic, costs of pre-opening activities and organization costs are expensed as incurred. Pre-opening costs include all expenses incurred by a restaurant prior to the restaurant's opening for business. These pre-opening costs include costs to relocate and reimburse restaurant management staff members, costs to recruit and train hourly restaurant staff members, wages, travel, and lodging costs for the Company’s training team and other support staff members, as well as rent expense. Pre-opening costs can fluctuate significantly from period to period based on the number and timing of restaurant openings and the specific pre-opening costs incurred for each restaurant. |
Leases | Leases The Company currently leases all of its corporate-owned restaurants, corporate offices, and certain equipment. The Company’s leases are accounted for under the requirements of ASC Topic 842, “ Leases ”, effective January 1, 2022. Upon the possession of a leased asset, the Company determines its classification as an operating or finance lease. The Company's real estate leases are classified as operating leases, and the Company's equipment leases are classified as finance leases. Generally, the real estate leases have initial terms averaging 10 years and typically include two five-year renewal options. Renewal options are generally not recognized as part of the initial right-of-use assets and lease liabilities as it is not reasonably certain at commencement date that the Company would exercise the options to extend the lease. The real estate leases typically provide for fixed minimum rent payments or variable rent payments based on a percentage of monthly sales or annual changes to the Consumer Price Index. Fixed minimum rent payments are recognized on a straight-line basis over the lease term from the date the Company takes possession of the leased property. Lease expense incurred before a corporate-owned store opens is recorded in pre-opening costs in the consolidated statements of operations. Once a corporate-owned store opens, the straight-line lease expense is recorded in occupancy and related expenses in the consolidated statements of operations. Many of the leases also require the Company to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in occupancy and related expenses in the consolidated statements of operations. The Company from time to time enters into sublease agreements as lessor which are immaterial for the years ended January 2, 2023 and December 31, 2021. See Note 10, “ Leases ,” for further discussion. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. A deferred tax asset or liability is recognized whenever there are (1) future tax effects from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and (2) operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which those differences are expected to be recovered or settled. Deferred tax assets are recognized to the extent the Company believes these assets will more likely than not be realized. In evaluating the realizability of deferred tax assets, the Company considers all available positive and negative evidence, including the interaction and the timing of future reversals of existing temporary differences, projected future taxable income, recent operating results and tax-planning strategies. When considered necessary, a valuation allowance is recorded to reduce the carrying amount of the deferred tax assets to their anticipated realizable value. The Company measures income tax uncertainties in accordance with a two-step process of evaluating a tax position. We first determine if it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is then measured, for purposes of financial statement recognition, as the largest amount that has a greater than 50% likelihood of being realized upon effective settlement. We had $0.2 million and $0.7 million unrecognized tax benefits at January 2, 2023 and December 31, 2021, respectively. The Company accrues interest related to uncertain tax positions in “Interest expense” and penalties in “General and administrative expenses.” At January 2, 2023 and December 31, 2021, there were no amounts accrued for interest or for penalties. |
New Accounting Pronouncements | New Accounting Pronouncements In October 2021, the FASB issued guidance which requires entities to recognize contract assets and contract liabilities in a business combination. As a public company, this standard was effective for the Company’s fiscal year beginning after January 3, 2023, including interim periods and will be applied prospectively to business combinations. It is not possible to determine the future impact of the application of this standard to future transactions. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Accounting Policies [Abstract] | |
Summary of Store Activity | Store activity for the years ended January 2, 2023 and December 31, 2021 is as follows: 2022 2021 Corporate-owned Franchised Total Corporate-owned Franchised Total Total BurgerFi and Anthony's 85 89 174 86 93 179 BurgerFi stores, beginning of year 25 93 118 17 102 119 BurgerFi stores opened 3 8 11 10 6 16 BurgerFi stores transferred/sold (3) 3 — (1) 1 — BurgerFi stores closed — (15) (15) (1) (16) (17) BurgerFi total stores, end of year 25 89 114 25 93 118 Anthony's stores, beginning of period 61 — 61 — — — Anthony's stores, acquired — — — 61 — 61 Anthony's stores opened — — — — — — Anthony's stores closed (1) — (1) — — — Anthony's total stores, end of year 60 — 60 61 — 61 |
Schedule of Goodwill | The following table represents changes to the Company's goodwill during the year ended January 2, 2023 and December 31, 2021 : Reporting Unit (in thousands) BurgerFi Anthony's Total Goodwill Balance, December 31, 2020 $ 119,542 $ — $ 119,542 Goodwill acquired in connection with Anthony’s acquisition — 80,495 80,495 Adjustment to goodwill acquired 4,439 — 4,439 Impairment Loss (106,476) — (106,476) Balance, December 31, 2021 $ 17,505 $ 80,495 $ 98,000 Adjustment to goodwill acquired — 190 190 Impairment Loss (17,505) (49,064) (66,569) Balance January 2, 2023 $ — $ 31,621 $ 31,621 |
Summary of Calculation of Basic and Diluted Income (Loss) Per Common Share | Basic and diluted net loss per common share is calculated as follows: (in thousands, except for per share data) Year Ended January 2, 2023 Year Ended December 31, 2021 Numerator: Net loss available to common shareholders $ (103,432) $ (121,494) Reversal of gain on change in value of warrant liability $ — $ (12,619) Net loss available to common shareholders - diluted $ (103,432) $ (134,113) Denominator: Weighted-average shares outstanding 22,173,694 18,408,247 Effect of dilutive securities Warrants — 211,854 UPOs — 4,346 Diluted weighted-average shares outstanding 22,173,694 18,624,447 Basic net loss per common share $ (4.66) $ (6.60) Diluted net loss per common share $ (4.66) $ (7.20) |
Schedules of Contract Balances, Franchise Revenue and Deferred Revenue | Opening and closing balances of contract liabilities and receivables from contracts with customers for the years ended January 2, 2023 and December 31, 2021 are as follows: (in thousands) Year Ended January 2, 2023 Year Ended December 31, 2021 Franchising receivables $ 168 $ 212 Gift card liability $ 1,847 $ 2,587 Unearned revenue, current $ 84 $ 468 Unearned revenue, long-term $ 1,008 $ 2,109 Revenue recognized during the years ended are as follows: (in thousands) Year Ended Year Ended December 31, 2021 Franchise Fees $ 1,806 $ 1,069 An analysis of unearned revenue is as follows: (in thousands) January 2, 2023 December 31, Balance, beginning of period $ 2,577 $ 3,306 Initial/Transfer franchise fees received 364 290 Revenue recognized for stores open and transfers during period (325) (235) Revenue recognized related to franchise agreement terminations (1,481) (834) Other unearned revenue (recognized) received (43) 50 Balance, end of period $ 1,092 $ 2,577 |
Property & Equipment (Tables)
Property & Equipment (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | roperty & equipment consisted of the following: (in thousands) January 2, 2023 December 31, 2021 Leasehold improvements $ 17,029 $ 19,900 Kitchen equipment and other equipment 8,196 7,810 Computers and office equipment 1,468 1,425 Furniture and fixtures 2,677 2,340 Vehicles 37 88 29,407 31,563 Less: Accumulated depreciation and amortization (10,036) (2,528) Property & equipment – net $ 19,371 $ 29,035 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Components of Intangible Assets | The following is a summary of the components of intangible assets and the related amortization expense: January 2, 2023 December 31, 2021 (in thousands) Amount Accumulated Amortization Net Carrying Value Amount Accumulated Amortization Net Carrying Value Franchise agreements $ 24,839 $ 7,245 $ 17,594 $ 24,839 $ 3,696 $ 21,143 Trade names / trademarks 143,726 8,010 135,716 143,750 3,220 140,530 Liquor license 6,678 — 6,678 6,678 — 6,678 License agreement 1,176 1,063 113 1,176 925 251 VegeFi product 135 28 107 135 14 121 $ 176,554 $ 16,346 $ 160,208 $ 176,578 $ 7,855 $ 168,723 |
Summary of Components of Related Amortization Expense | The estimated aggregate amortization expense for intangible assets over the next five years ending January 2 and thereafter is as follows: (in thousands) 2023 $ 8,467 2024 8,353 2025 8,353 2026 8,353 2027 8,204 Thereafter 111,800 Total $ 153,530 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Paid At Acquisition Date | The acquisition-date fair value of the consideration transferred totaled $75.9 million, which consisted of the following: Consideration Paid (in thousands) Common Stock $ 25,562 Preferred Stock 46,906 Option Consideration Shares 3,403 Total Consideration $ 75,871 |
Summary of Fair Values of Assets Acquired Net of Current Liabilities | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company determined the fair value of certain intangible assets. The measurement period for such purchase price allocations ended on November 3, 2022 or twelve months from the date of acquisition and the allocation below is final. (in thousands) Fair Value November 3, 2021 Cash $ 5,522 Accounts receivable 597 Inventory 986 Other current assets 1,662 Property & equipment 13,534 Intangible assets 67,344 Accounts payable, accrued expenses, and other current liabilities (15,451) Long-term borrowings (77,063) Deferred tax liability $ (1,755) Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed $ (4,624) Consideration paid 75,871 Goodwill $ 80,495 |
Amount of Revenue and Net Loss | The amounts of revenue and net loss for Anthony's included in the Company’s consolidated statement of operations for the period from November 3, 2021, the acquisition date, through December 31, 2021 are as follows: (in thousands) 2021 Revenue $ 22,419 Net Loss (142) The following represents the unaudited proforma consolidated statement of operations as if the Anthony's acquisition had been included in the consolidated results of the Company for the entire year ending December 31, 2021: (in thousands) Year Ended December 31, 2021 Revenue $ 168,906 Net Loss (138,490) |
Impairment (Tables)
Impairment (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Details of Impairment of Long-Lived Assets Held and Used by Asset | This consisted of the following: (in thousands) Year Ended January 2, 2023 Year Ended December 31, 2021 Goodwill $ 66,569 $ 106,476 Definite-lived intangible assets — 7,706 Long-lived assets 3,100 615 Right-of-use assets 3,846 — Total non-cash impairment charge $ 73,515 $ 114,797 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | (in thousands) January 2, December 31, Term loan $ 54,507 $ 57,761 Related party note payable 10,000 10,000 Revolving line of credit 4,000 2,500 Other notes payable 780 874 Finance lease liability 933 — Total Debt $ 70,220 $ 71,135 Less: Unamortized debt discount to related party note (765) (1,276) Less: Unamortized debt issuance costs (1,441) (1,007) Total Debt, net 68,014 68,852 Less: Short-term borrowings, including finance leases (4,985) (3,331) Total Long-term borrowings, including finance leases and related party note $ 63,029 $ 65,521 The loan and revolving line of credit are secured by substantially all of the Company’s assets and incur interest on outstanding amounts at the following rates per annum through maturity: Time Period Interest Rate Through December 31, 2022 6.75 % From January 1, 2023 through June 15 2023 6.75 % From June 16, 2023 through December 31, 2023 6.75 % From January 1, 2024 through June 15, 2024 7.25 % From June 16, 2024 through maturity 7.75 % |
Schedule of Principal Payments under Term Loan | The terms of the amended Credit Agreement require the Company to repay the principal of the term loan in quarterly installments with the balance due at the maturity date, as follows: in thousands 2023 $ 3,254 2024 3,254 2025 47,999 Total 54,507 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Leases [Abstract] | |
Assets And Liabilities, Lessee | Upon transition, on January 1, 2022, the Company recorded the following increases (decreases) to the respective line items on the Condensed Consolidated Balance Sheet: (in thousands) Adjustment as of January 2, 2022 Prepaid expenses $ (773) Operating right-of-use asset, net 57,385 Finance right-of-use asset, net 855 Deferred rent (900) Short-term operating lease liability 9,457 Short-term finance lease liability 143 Long-term operating lease liability 49,149 Long-term finance lease liability 712 A summary of lease terms and discount rates for finance and operating leases is as follows: Year Ended Weighted-average remaining lease term (in years): Operating leases 6.02 years Finance leases 6.30 years Weighted-average discount rate: Operating leases 6.0 % Finance leases 6.1 % |
Lease, Cost | A summary of finance and operating lease right-of-use assets and liabilities as of January 2, 2023 is as follows: (in thousands) Classification Year Ended Operating leases Operating right-of-use asset, net $ 45,741 Finance leases Property & equipment, net 852 Total right-of-use assets $ 46,593 Operating leases: Short-term operating lease liability $ 9,924 Long-term operating lease liability 40,748 Finance leases: Short-term borrowings, including finance leases 150 Long-term borrowings, including finance leases 783 Total lease liabilities $ 51,604 The components of lease expense for the year ended January 2, 2023 is as follows: (in thousands) Classification Year Ended Operating lease cost Occupancy and related expenses $ 12,969 Operating lease impairment Asset impairment 3,846 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization expense 258 Interest on lease liabilities Interest expense 63 Less: Sublease income Occupancy and related expenses (194) Total lease cost $ 16,942 |
Schedule of approximate future minimum payments on operating leases | The maturity of the Company's operating and finance lease liabilities as of January 2, 2023 is as follows: (in thousands) Operating Leases Finance Leases 2023 $ 12,653 $ 200 2024 11,040 184 2025 9,544 170 2026 7,728 159 2027 6,318 152 2028 and thereafter 13,442 253 Total undiscounted lease payments 60,726 1,118 Less: present value adjustment (10,054) (185) Total net lease liabilities $ 50,672 $ 933 |
Finance Lease, Liability, Fiscal Year Maturity | The maturity of the Company's operating and finance lease liabilities as of January 2, 2023 is as follows: (in thousands) Operating Leases Finance Leases 2023 $ 12,653 $ 200 2024 11,040 184 2025 9,544 170 2026 7,728 159 2027 6,318 152 2028 and thereafter 13,442 253 Total undiscounted lease payments 60,726 1,118 Less: present value adjustment (10,054) (185) Total net lease liabilities $ 50,672 $ 933 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for (Benefit) From Income Taxes | The provision for (benefit) from income taxes is set forth below: (in thousands) January 2, 2023 December 31, 2021 Current: U.S. Federal $ — $ — State 35 — Total current income tax expense 35 — Deferred: U.S. Federal (10,002) (7,833) State (1,469) (2,192) Total deferred income tax benefit (11,471) (10,025) Valuation allowance 11,341 10,337 (130) 312 Income tax (benefit) expense $ (95) $ 312 |
Schedule of Reconciliation of Income Tax Rate | The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to the Company’s effective tax rate is set forth below: (in thousands) January 2, 2023 December 31, 2021 Income tax provision at the U.S. federal statutory rate $ (21,741) $ (25,407) Permanent differences 870 402 Share-based compensation (463) 496 State income taxes, net of federal benefit (1,640) (1,888) Change in warrant liability (527) (2,900) Goodwill impairment 11,471 19,820 True-up 1,983 42 Change in valuation allowance 11,342 10,337 Change in rate (249) (406) Tax credits (1,141) (184) Total income tax (benefit) expense $ (95) $ 312 |
Schedule of Deferred Tax Assets (Liabilities) | The components of the Company's deferred tax liabilities at January 2, 2023 and December 31, 2021 are set forth below: (in thousands) January 2, 2023 December 31, 2021 Deferred tax assets (liabilities): Allowance for doubtful accounts $ 40 $ 57 Goodwill 4,625 2,794 Fixed Assets 2,164 — Deferred franchise fees 277 684 Deferred rent — 239 Stock compensation 1,730 1,250 Net operating losses, Federal 13,649 11,215 Net operating losses, State 2,691 2,066 Deferred payroll taxes — 217 Interest expense 5,351 3,540 Lease liability 13,104 — Tax credits 1,854 713 Other 1,599 1,075 Gross deferred tax assets 47,084 23,850 Valuation allowance (22,629) (11,383) Net deferred tax assets 24,455 12,467 Intangible assets (13,878) (13,300) Lease ROU asset (11,800) — Fixed assets — (520) Deferred tax liabilities (25,678) (13,820) Total net deferred tax (liabilities) assets $ (1,223) $ (1,353) |
Schedule of Unrecognized Tax Benefits | The following table summarizes the Company's unrecognized tax benefits at January 2, 2023 and December 31, 2021: (in thousands) January 2, 2023 December 31, 2021 Beginning balance $ 660 $ — Additions based on tax positions related to the current year — — Additions for tax positions of prior years — 660 Reductions for positions of prior years (431) — Ending balance $ 229 $ 660 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Stockholders' Equity Note [Abstract] | |
Summary of Activity of Restricted Stock Units | The following table summarizes activity of restricted stock units during the year ended January 2, 2023: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2021 1,783,698 $ 14.18 Granted 587,847 4.55 Vested (477,799) 13.08 Forfeited (448,146) 10.85 Non-vested at January 2, 2023 1,445,600 $ 11.68 The following table summarizes activity of the restricted stock units during the year ended January 2, 2023: Performance Condition Service Condition Market Condition Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2021 1,251,698 $ 15.15 252,000 $ 15.79 280,000 $ 8.42 Granted 282,000 4.12 115,847 6.26 190,000 4.13 Vested (241,952) 15.14 (205,847) 11.33 (30,000) 8.41 Forfeited (240,646) 13.14 — — (207,500) 8.20 Non-vested at January 2, 2023 1,051,100 $ 12.62 162,000 $ 14.65 232,500 $ 5.34 |
Share-based Payment Arrangement, Performance Shares, Valuation Assumptions | The input variables are noted in the table below: Year Ended Year Ended Risk-free interest rate 0.4% - 4.1% 1.03 % Expected life in years 2.0 years 3.0 years Expected volatility 57.3% - 65.9% 65.9 % Expected dividend yield * 0 % 0 % * The Monte Carlo method assumes a reinvestment of dividends. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of January 2, 2023 and December 31, 2021. Items Measured at Fair Value at January 2, 2023 (in thousands) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Warrant liability — 195 — Total $ — $ 195 $ — Items Measured at Fair Value at December 31, 2021 (in thousands) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Warrant liability — 2,706 Total $ — $ — $ 2,706 |
Fair Value Measurement Inputs and Valuation Techniques | The input variables for the Black-Scholes are noted in the table below: January 2, 2023 December 31, 2021 Risk-free interest rate 4.14 % 1.11 % Expected life in years 3.0 years 3.96 years Expected volatility 68.0 % 41.8 % Expected dividend yield 0 % 0 % |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jan. 02, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following tables present revenue, capital expenditures, depreciation and amortization, pre-opening costs, interest expense and net loss by segment: (in thousands) Year Ended January 2, 2023 Year Ended December 31, 2021 Revenue: BurgerFi $ 49,901 $ 46,448 Anthony's* 128,819 22,419 Total $ 178,720 $ 68,867 Capital expenditures: BurgerFi $ 1,428 $ 10,348 Anthony's* 1,090 317 Total $ 2,517 $ 10,665 Depreciation and amortization: BurgerFi $ 9,571 $ 8,694 Anthony's 7,567 1,366 Total $ 17,138 $ 10,060 Pre-opening costs: BurgerFi $ 474 $ 1,905 Anthony's — — Total $ 474 $ 1,905 Interest expense: BurgerFi $ 3,843 $ 673 Anthony's 4,816 733 Total $ 8,659 $ 1,406 Net loss: BurgerFi $ (50,375) $ (121,352) Anthony's* (53,057) (142) Total $ (103,432) $ (121,494) * Amounts for Anthony's are only presented from November 3, 2021, the date of acquisition. Total assets by segment are as follows: (in thousands) Year Ended January 2, 2023 Year Ended December 31, 2021 Total assets: BurgerFi $ 136,811 $ 161,675 Anthony's 139,969 156,044 Total $ 276,780 $ 317,719 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||||
Dec. 31, 2021 USD ($) store | Jan. 02, 2023 USD ($) store brand state shares | Dec. 31, 2021 USD ($) store | Dec. 30, 2021 | Dec. 31, 2020 USD ($) store | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Number of restaurants | store | 179 | 174 | 179 | ||
Number of brands | brand | 2 | ||||
Number of international stores | store | 1 | 1 | |||
Cash and cash equivalents | $ 14,889,000 | $ 11,917,000 | $ 14,889,000 | ||
Allowance for uncollectible accounts | 0 | 200,000 | 0 | ||
Other income, employee retention credits | 2,600,000 | ||||
Collected preparation fees | 1,400,000 | ||||
Other receivables from employee retention tax credits | 1,500,000 | ||||
Other asset impairments | 6,900,000 | 8,300,000 | |||
Asset impairment charges, excluding goodwill | 3,100,000 | 600,000 | |||
Operating lease impairment | 3,846,000 | 0 | |||
Goodwill impairment loss | 66,569,000 | 106,476,000 | |||
Intangible assets, net | 168,723,000 | 160,208,000 | 168,723,000 | ||
Restructuring costs | 1,459,000 | 0 | |||
Severance benefits | 800,000 | ||||
Professional Fees | $ 700,000 | ||||
Number of states in which entity operates | state | 23 | ||||
Percentage of total franchise fee | 50% | ||||
Sales tax payable | 1,100,000 | $ 1,000,000 | 1,100,000 | ||
Advertising expenses | 2,400,000 | 900,000 | |||
Revenue | 178,720,000 | 68,867,000 | |||
Brand development, co-op and advertising expense | 3,870,000 | 2,462,000 | |||
Pre-opening costs | 474,000 | 1,905,000 | |||
Unrecognized tax benefits | 660,000 | 229,000 | 660,000 | $ 0 | |
Total net lease liabilities | $ 50,672,000 | ||||
Franchise agreements | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful life of intangible assets | 7 years | ||||
Intangible assets, net | $ 21,143,000 | $ 17,594,000 | 21,143,000 | ||
Trade Names | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful life of intangible assets | 30 years | ||||
Licensing Agreements | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful life of intangible assets | 22 months | 10 years | |||
Other asset impairments | 7,700,000 | ||||
VegeFi product | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful life of intangible assets | 22 months | 10 years | 10 years | ||
Intangible assets, net | $ 121,000 | $ 107,000 | 121,000 | ||
Liquor license | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Intangible assets, net | 6,678,000 | $ 6,678,000 | 6,678,000 | ||
Purchasing Benchmark | Supplier Concentration Risk | One Distributor | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk percentage | 80% | ||||
Credit Agreement | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Deferred financing costs | 1,000,000 | $ 900,000 | 1,000,000 | ||
Amortization expense of deferred financing costs | 500,000 | 100,000 | |||
Brand Development and Co-op Advertising Expenses | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Revenue | 1,400,000 | 1,500,000 | |||
Brand development, co-op and advertising expense | 1,800,000 | 1,700,000 | |||
Brand Development and Co-op Advertising Expenses | South Florida | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Advertising expenses | 800,000 | 800,000 | |||
Revenue | $ 400,000 | 500,000 | |||
Public Warrants | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | shares | 15,063,800 | ||||
Warrant | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | shares | 75,000 | ||||
Common Stock | Unit Purchase Option | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | shares | 75,000 | ||||
Restricted Shares | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | shares | 1,495,600 | ||||
Maximum | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Federal deposit insurance corporation insured amount | $ 250,000 | ||||
Estimated useful life of intangible assets | 7 years | ||||
Lease term | 10 years | ||||
Minimum | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful life of intangible assets | 5 years | ||||
Lease term | 5 years | ||||
Amount Due from Commercial Credit Card Companies | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Cash and cash equivalents | $ 1,100,000 | $ 2,400,000 | $ 1,100,000 | ||
BurgerFi | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Number of restaurants | store | 118 | 114 | 118 | 119 | |
Goodwill impairment loss | $ 17,505,000 | $ 106,476,000 | |||
Revenue | 49,901,000 | 46,448,000 | |||
Pre-opening costs | $ 474,000 | $ 1,905,000 | |||
Anthony's | |||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||
Number of restaurants | store | 61 | 60 | 61 | 0 | |
Goodwill impairment loss | $ 49,064,000 | $ 0 | |||
Revenue | 128,819,000 | 22,419,000 | |||
Pre-opening costs | $ 0 | $ 0 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Summary of Store Activity (Details) - store | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Store Activity [Roll Forward] | ||
Stores, beginning of year | 179 | |
Stores, end of year | 174 | 179 |
BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 118 | 119 |
Stores opened | 11 | 16 |
Stores transferred/sold to the Company | 0 | 0 |
Stores closed during the year | (15) | (17) |
Stores, end of year | 114 | 118 |
Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 61 | 0 |
Stores opened | 0 | 0 |
Stores closed during the year | (1) | 0 |
Number of stores acquired | 0 | (61) |
Stores, end of year | 60 | 61 |
Corporate-owned | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 86 | |
Stores, end of year | 85 | 86 |
Corporate-owned | BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 25 | 17 |
Stores opened | 3 | 10 |
Stores transferred/sold to the Company | (3) | (1) |
Stores closed during the year | 0 | (1) |
Stores, end of year | 25 | 25 |
Corporate-owned | Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 61 | 0 |
Stores opened | 0 | 0 |
Stores closed during the year | (1) | 0 |
Number of stores acquired | 0 | (61) |
Stores, end of year | 60 | 61 |
Franchised | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 93 | |
Stores, end of year | 89 | 93 |
Franchised | BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 93 | 102 |
Stores opened | 8 | 6 |
Stores transferred/sold to the Company | 3 | 1 |
Stores closed during the year | (15) | (16) |
Stores, end of year | 89 | 93 |
Franchised | Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 0 | 0 |
Stores opened | 0 | 0 |
Stores closed during the year | 0 | 0 |
Number of stores acquired | 0 | 0 |
Stores, end of year | 0 | 0 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 98,000 | $ 119,542 |
Goodwill acquired in connection with Anthony’s acquisition | 80,495 | |
Adjustment to goodwill acquired | 190 | 4,439 |
Impairment Loss | (66,569) | (106,476) |
Goodwill, ending balance | 31,621 | 98,000 |
BurgerFi | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 17,505 | 119,542 |
Goodwill acquired in connection with Anthony’s acquisition | 0 | |
Adjustment to goodwill acquired | 0 | 4,439 |
Impairment Loss | (17,505) | (106,476) |
Goodwill, ending balance | 0 | 17,505 |
Anthony's | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 80,495 | 0 |
Goodwill acquired in connection with Anthony’s acquisition | 80,495 | |
Adjustment to goodwill acquired | 190 | 0 |
Impairment Loss | (49,064) | 0 |
Goodwill, ending balance | $ 31,621 | $ 80,495 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Summary of Calculation of Basic and Diluted Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Numerator: | ||
Net loss available to common shareholders | $ (103,432) | $ (121,494) |
Reversal of gain on change in value of warrant liability | 0 | (12,619) |
Net loss available to common shareholders - diluted | $ (103,432) | $ (134,113) |
Denominator: | ||
Weighted-average shares outstanding (in shares) | 22,173,694 | 18,408,247 |
Incremental common shares attributable to dilutive effect of restricted stock grants and warrants (in shares) | 0 | 211,854 |
Incremental common shares attributable to dilutive effect of unit purchase option (in shares) | 0 | 4,346 |
Diluted weighted-average shares outstanding (in shares) | 22,173,694 | 18,624,447 |
Basic net loss per common share (in dollars per share) | $ (4.66) | $ (6.60) |
Diluted net loss income per common share (in dollars per share) | $ (4.66) | $ (7.20) |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies - Summary of Contract Balances (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Franchising receivables | $ 168 | $ 212 |
Gift card liability | 1,847 | 2,587 |
Unearned revenue, current | 84 | 468 |
Unearned revenue, long-term | $ 1,008 | $ 2,109 |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies - Summary of Franchise Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Franchise Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Recognized revenue | $ 1,806 | $ 1,069 |
Organization and Summary of _10
Organization and Summary of Significant Accounting Policies - Analysis of Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Contract With Customer, Liability Activity [Roll Forward] | ||
Balance, beginning of period | $ 2,577 | $ 3,306 |
Initial/Transfer franchise fees received | 364 | 290 |
Revenue recognized for stores open and transfers during period | (325) | (235) |
Revenue recognized related to franchise agreement terminations | (1,481) | (834) |
Other unearned revenue (recognized) received | (43) | 50 |
Balance, end of period | $ 1,092 | $ 2,577 |
Organization and Summary of _11
Organization and Summary of Significant Accounting Policies - Leases (Details) | 12 Months Ended |
Jan. 02, 2023 numberOfRenewalOptions | |
Five Year Renewal Option | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |
Number of renewal options | 2 |
Operating lease renewal period | 5 years |
Minimum | Building | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |
Operating lease initial obligation period | 10 years |
Property & Equipment - Summary
Property & Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | $ 29,407 | $ 31,563 |
Less: Accumulated depreciation and amortization | (10,036) | (2,528) |
Property and equipment – net | 19,371 | 29,035 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 17,029 | 19,900 |
Kitchen equipment and other equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 8,196 | 7,810 |
Computers and office equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 1,468 | 1,425 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 2,677 | 2,340 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | $ 37 | $ 88 |
Property & Equipment (Details)
Property & Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 8.7 | $ 2.5 |
Long-lived assets | $ 0.6 | |
ImpairmentLongLivedAssetHeldForUseStatementOfIncomeOrComprehensiveIncomeExtensibleEnumerationNotDisclosedFlag | property & equipment | property & equipment |
Intangible Assets - Summary of
Intangible Assets - Summary of Components of Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Finite Lived Intangible Assets [Line Items] | ||
Amount | $ 176,554 | $ 176,578 |
Accumulated Amortization | 16,346 | 7,855 |
Net Carrying Value | 160,208 | 168,723 |
Franchise agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 24,839 | 24,839 |
Accumulated Amortization | 7,245 | 3,696 |
Net Carrying Value | 17,594 | 21,143 |
Trade names / trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 143,726 | 143,750 |
Accumulated Amortization | 8,010 | 3,220 |
Net Carrying Value | 135,716 | 140,530 |
Liquor license | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 6,678 | 6,678 |
Accumulated Amortization | 0 | 0 |
Net Carrying Value | 6,678 | 6,678 |
License agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 1,176 | 1,176 |
Accumulated Amortization | 1,063 | 925 |
Net Carrying Value | 113 | 251 |
VegeFi product | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 135 | 135 |
Accumulated Amortization | 28 | 14 |
Net Carrying Value | $ 107 | $ 121 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impairments of intangible assets | $ 0 | $ 7.7 |
Amortization expense | $ 8.5 | $ 7.6 |
Intangible Assets - Summary o_2
Intangible Assets - Summary of Components of Related Amortization Expense (Details) $ in Thousands | Jan. 02, 2023 USD ($) |
Amortization Expense For Intangible Assets Over The Next Five Years | |
2023 | $ 8,467 |
2024 | 8,353 |
2025 | 8,353 |
2026 | 8,353 |
2027 | 8,204 |
Thereafter | 111,800 |
Total | $ 153,530 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Nov. 03, 2021 USD ($) store | Jan. 02, 2023 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |||
Business acquisition, transaction costs | $ 3,100 | ||
Business acquisition, financing costs | 800 | ||
Adjustment to goodwill acquired | 190 | $ 4,439 | |
Anthony's | |||
Business Acquisition [Line Items] | |||
Adjustment to goodwill acquired | $ 190 | $ 0 | |
Hot Air, Inc. | |||
Business Acquisition [Line Items] | |||
Percentage of shares acquired | 100% | ||
Number of businesses acquired | store | 61 | ||
Intangible assets | $ 67,344 | ||
Trademarks | Hot Air, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 60,700 | ||
Useful life | 30 years | ||
Liquor license | Hot Air, Inc. | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 6,600 |
Acquisitions - Schedule of Cons
Acquisitions - Schedule of Consideration Paid (Details) - Anthony's* $ in Thousands | Nov. 03, 2021 USD ($) |
Consideration paid | |
Consideration paid | $ 75,871 |
Common Stock | |
Consideration paid | |
Class of stock | 25,562 |
Preferred Stock | |
Consideration paid | |
Class of stock | 46,906 |
Option Consideration Shares | |
Consideration paid | |
Class of stock | $ 3,403 |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Nov. 03, 2021 | Jan. 02, 2023 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 31,621 | $ 98,000 | $ 119,542 | |
Hot Air, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 5,522 | |||
Accounts receivable | 597 | |||
Inventory | 986 | |||
Other current assets | 1,662 | |||
Property & equipment | 13,534 | |||
Intangible assets | 67,344 | |||
Accounts payable, accrued expenses, and other current liabilities | (15,451) | |||
Long-term borrowings | (77,063) | |||
Deferred tax liability | (1,755) | |||
Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed | (4,624) | |||
Consideration paid | 75,871 | |||
Goodwill | $ 80,495 |
Acquisitions - Revenues and Net
Acquisitions - Revenues and Net Loss (Details) - Anthony's* $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 22,419 |
Net Loss | $ (142) |
Acquisitions - Pro Forma (Detai
Acquisitions - Pro Forma (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Revenue | $ 168,906 |
Net Loss | $ (138,490) |
Impairment - Schedule of Impair
Impairment - Schedule of Impairment Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment loss | $ 66,569 | $ 106,476 |
Definite-lived intangible assets | 0 | 7,706 |
Long-lived assets | 3,100 | 615 |
Right-of-use assets | 3,846 | 0 |
General and administrative expenses | $ 73,515 | $ 114,797 |
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Goodwill and intangible asset impairment | Goodwill and intangible asset impairment |
Impairment - Narrative (Details
Impairment - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Finite Lived Intangible Assets [Line Items] | ||
Non-cash impairment charge | $ 73,515 | $ 114,797 |
Goodwill impairment loss | 66,569 | 106,476 |
Other impairment charges | 6,900 | |
BurgerFi | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill impairment loss | 17,505 | 106,476 |
Other impairment charges | 7,700 | |
Anthony's | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill impairment loss | $ 49,064 | 0 |
Other impairment charges | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jan. 03, 2022 shares | Nov. 30, 2021 USD ($) | Apr. 30, 2021 USD ($) shares | Jan. 02, 2023 USD ($) shares | Dec. 31, 2021 USD ($) | Jul. 31, 2022 ft² | Feb. 28, 2022 ft² | Jan. 01, 2020 | |
Related Party Transaction [Line Items] | ||||||||
Due from related companies | $ 300 | $ 0 | ||||||
Rent expense | 0 | |||||||
Annual cash compensation and expense reimbursements | $ 100 | |||||||
Affiliated Entity | Entity Under Common Ownership With Significant Shareholder | ||||||||
Related Party Transaction [Line Items] | ||||||||
Rent expense | 500 | |||||||
Area of real estate property | ft² | 18,500 | 16,500 | ||||||
Affiliated Entity | Entity Under Common Ownership With Significant Shareholder | North Palm Beach Lease | ||||||||
Related Party Transaction [Line Items] | ||||||||
Lease term | 36 months | |||||||
Rent expense | 100 | 200 | ||||||
Affiliated Entity | Strategic Advisory Services | Consultant | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payments for related party transaction | $ 100 | 0 | ||||||
Expenses from transactions with related party | $ 250 | |||||||
Restricted Stock Units (RSUs) | ||||||||
Related Party Transaction [Line Items] | ||||||||
Award issued (in shares) | shares | 50,000 | |||||||
Restricted Stock Units (RSUs) | Affiliated Entity | Strategic Advisory Services | Consultant | ||||||||
Related Party Transaction [Line Items] | ||||||||
Vesting period | 5 years | |||||||
Units vested (in shares) | shares | 10,000 | |||||||
Share-based compensation | $ 400 | 200 | ||||||
Common Stock | Chief Operating Officer | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares granted (in shares) | shares | 38,000 | |||||||
Royalty | ||||||||
Related Party Transaction [Line Items] | ||||||||
Royalty revenue received from franchisees | $ 100 | $ 300 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 1 Months Ended | 4 Months Ended | 18 Months Ended | |||||||
Jan. 11, 2023 USD ($) shares | Mar. 28, 2022 USD ($) | Feb. 25, 2022 USD ($) | Aug. 11, 2021 USD ($) claim | May 21, 2021 USD ($) | Feb. 29, 2020 USD ($) | Apr. 30, 2020 USD ($) Deposit | Aug. 26, 2022 USD ($) | Jan. 02, 2023 USD ($) shares | Dec. 31, 2021 USD ($) shares | |
Commitments And Contingencies [Line Items] | ||||||||||
Asset held for sale | $ 732 | $ 732 | ||||||||
Common stock, shares issued | shares | 22,257,772 | 21,303,500 | ||||||||
Conditional purchase obligations | $ 3,100 | |||||||||
Eric Gilbert v. BurgerFi International, Inc | Settled Litigation | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Loss contingency payments | $ 150 | |||||||||
John Rosatti, as Trustee of the John Rosatti Revocable Trust v. BurgerFi International, Inc | Settled Litigation | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Loss contingency, damages sought | $ 10,000 | |||||||||
John Rosatti, as Trustee of the John Rosatti Revocable Trust v. BurgerFi International, Inc | Settled Litigation | Subsequent Event | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Loss contingency payments | $ 500 | |||||||||
Common stock, shares issued | shares | 200,000 | |||||||||
Loss contingency, damages paid, value | $ 800 | |||||||||
Burger Guys of Dania Pointe, et. al | Pending Litigation | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Loss contingency, damages sought | $ 2,000 | |||||||||
All Round Food Bakery Products, Inc. v. BurgerFi International, LLC and Neri’s Bakery Products, Inc. et al | Pending Litigation | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Loss contingency, damages sought | $ 1,000 | |||||||||
Second 82nd SM, LLC c BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. | Pending Litigation | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Pending claims | claim | 7 | |||||||||
Loss contingency, damages sought | $ 1,500 | |||||||||
Lion Point Capital Allegation | Pending Litigation | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Loss contingency, damages sought | $ 26,000 | |||||||||
Employee Retention Claims | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Estimate of possible loss | 800 | |||||||||
BF Dania Beach, LLC | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Aggregate purchase price | $ 1,300 | |||||||||
Number of cash deposits | Deposit | 3 | |||||||||
Cash deposits received | $ 900 | |||||||||
Cash deposits returned to unrelated third-party purchaser | $ 900 | |||||||||
Asset held for sale | $ 700 | $ 700 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Nov. 03, 2021 | Jan. 02, 2023 | Dec. 31, 2021 | |
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | ||
Redeemable preferred stock, fair value | $ 51.4 | $ 47.5 | |
Fair value adjustment of mandatorily redeemable preferred stock interest expense | 3.9 | $ 0.6 | |
Preferred Stock, Dividend, Three Month Period Ending September 30, 2024 | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Mandatorily redeemable preferred stock, dividend compound rate, quarterly percentage | 0.35% | ||
Preferred Stock, Dividend, Period Until June 15, 2024 | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Mandatorily redeemable preferred stock, early repayment covenant, annual dividend rate | 5% | ||
Preferred Stock, Dividend, Quarterly Period On November 3, 2027 | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Mandatorily redeemable preferred stock, dividend compound rate, quarterly percentage | 0.35% | ||
Hot Air, Inc. | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Shares issued to acquire business (in shares) | 2,120,000 | ||
Mandatorily Redeemable Preferred Stock | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | ||
Mandatorily Redeemable Preferred Stock | Preferred Stock, Dividend, Quarterly Period From June 15, 2024 | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Dividend rate | 7% | ||
Mandatorily Redeemable Preferred Stock | Preferred Stock, Dividend, Quarterly Period On November 3, 2027 | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Dividend rate | 10% | ||
Mandatorily Redeemable Preferred Stock | Hot Air, Inc. | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Class of stock | $ 53 | ||
Default rate | Preferred Stock, Dividend, Quarterly Period On November 3, 2027 | |||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Dividend rate | 2% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Other notes payable | $ 780 | $ 874 |
Finance lease liability | 933 | 0 |
Total Debt | 70,220 | 71,135 |
Less: Unamortized debt discount to related party note | (765) | (1,276) |
Less: Unamortized debt issuance costs | (1,441) | (1,007) |
Total Debt, net | 68,014 | 68,852 |
Less: Short-term borrowings, including finance leases | (4,985) | (3,331) |
Total Long-term borrowings, including finance leases and related party note | 63,029 | 65,521 |
Related Party Note | ||
Debt Instrument [Line Items] | ||
Loans payable | 10,000 | 10,000 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | 54,507 | 57,761 |
Revolving Line of Credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 4,000 | $ 2,500 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 12 Months Ended | |||||||||||
Feb. 24, 2023 USD ($) | Nov. 03, 2021 USD ($) | May 11, 2020 USD ($) | Jan. 02, 2023 USD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2023 | Jun. 16, 2023 USD ($) | Mar. 31, 2023 | Feb. 01, 2023 USD ($) | Jan. 03, 2023 | Dec. 31, 2022 | Mar. 09, 2022 | |
Debt Instrument [Line Items] | ||||||||||||
Less: Unamortized debt discount to related party note | $ 765,000 | $ 1,276,000 | ||||||||||
Related party note payable | 9,235,000 | 8,724,000 | ||||||||||
Note payable, monthly payment | 9,000 | |||||||||||
Proceeds from borrowings | $ 1,500,000 | 0 | ||||||||||
Notes Payable, Noncurrent | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate | 7% | |||||||||||
Debt instrument, term | 7 years | |||||||||||
Junior Subordinated Debt | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 15,000,000 | |||||||||||
Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Incremental deferred interest, annual percentage | 2% | |||||||||||
Less: Unamortized debt discount to related party note | $ 1,300,000 | |||||||||||
Debt covenant, net cash proceeds | 5,000,000 | |||||||||||
Liquidity requirement | 9,500,000 | |||||||||||
Amortization expense of deferred financing costs | 500,000 | 100,000 | ||||||||||
Deferred financing costs | $ 900,000 | 1,000,000 | ||||||||||
Credit Agreement | Forecast | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Deferred interest payable | $ 300,000 | |||||||||||
Credit Agreement | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | 5,000,000 | |||||||||||
Incremental deferred interest, annual percentage | 1% | |||||||||||
Credit Agreement | Repayment on or Prior to December 31, 2022 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Deferred interest due | 0% | |||||||||||
Credit Agreement | Repayment Between January 1, 2023 and March 31, 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Deferred interest due | 50% | |||||||||||
Credit Agreement | Interest Period Through June 15, 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate | 4.75% | |||||||||||
Credit Agreement | Interest Period From January 1, 2023 Through June 15, 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate | 5.75% | |||||||||||
Credit Agreement | Interest Period From June 16, 2023 Through December 31, 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate | 6.75% | |||||||||||
Credit Agreement | Interest Period From January 1, 2024 Through June 15, 2024 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate | 7.25% | |||||||||||
Credit Agreement | Interest Period From June 15, 2024 Through Maturity | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Stated interest rate | 7.75% | |||||||||||
Credit Agreement | Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 57,800,000 | |||||||||||
Credit Agreement | Term Loan | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt exchanged | 10,000,000 | |||||||||||
Debt forgiven | $ 10,000,000 | |||||||||||
Credit Agreement | Revolving Line of Credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit, maximum borrowing capacity | 4,000,000 | |||||||||||
Repayment of line of credit | $ 800,000 | |||||||||||
Senior lease-adjusted leverage ratio (greater than) | 7 | |||||||||||
Minimum fixed charge coverage ratio | 1.10 | |||||||||||
Consolidated fixed charge coverage ratio, minimum | 1.15 | |||||||||||
Consolidated fixed charge coverage ratio, maximum | 1.15 | |||||||||||
Consolidated fixed charge coverage ratio requirement | 0.25 | |||||||||||
Credit Agreement | Revolving Line of Credit | Forecast | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Senior lease-adjusted leverage ratio (greater than) | 6.50 | 7 | ||||||||||
Credit Agreement | Loans Payable, Noncurrent | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Less: Unamortized debt discount to related party note | $ 1,300,000 | |||||||||||
Amortization expense of deferred financing costs | 500,000 | 100,000 | ||||||||||
Related party note payable | $ 9,200,000 | |||||||||||
Paycheck Protection Program, CARES Act | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt forgiven | $ 2,200,000 | |||||||||||
Proceeds from borrowings | $ 2,200,000 | |||||||||||
New Junior Subordinated Secured Notes | Junior Subordinated Debt | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 5,100,000 | $ 10,000,000 | ||||||||||
Stated interest rate | 4% |
Debt - Repayment of Principal (
Debt - Repayment of Principal (Details) - Credit Agreement $ in Thousands | Jan. 02, 2023 USD ($) |
Maturities of Long-term Debt [Abstract] | |
2023 | $ 3,254 |
2024 | 3,254 |
2025 | 47,999 |
Total | $ 54,507 |
Debt Interest Incurred (Details
Debt Interest Incurred (Details) - Credit Agreement | Jan. 02, 2023 |
Interest Period One | |
Debt Instrument [Line Items] | |
Stated interest rate | 6.75% |
Interest Period Two | |
Debt Instrument [Line Items] | |
Stated interest rate | 6.75% |
Interest Period Three | |
Debt Instrument [Line Items] | |
Stated interest rate | 6.75% |
Interest Period Four | |
Debt Instrument [Line Items] | |
Stated interest rate | 7.25% |
Interest Period Five | |
Debt Instrument [Line Items] | |
Stated interest rate | 7.75% |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Base rent cost | $ 16.2 | $ 5.2 |
Leases - Adjustments to Balance
Leases - Adjustments to Balance Sheet (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Jan. 01, 2022 | Dec. 31, 2021 |
Lessor, Lease, Description [Line Items] | |||
Operating right-of-use asset, net | $ 45,741 | $ 0 | |
Finance right-of-use asset, net | 852 | ||
Short-term operating lease liability | 9,924 | 0 | |
Short-term borrowings, including finance leases | 150 | ||
Long-term operating lease liability | 40,748 | $ 0 | |
Long-term borrowings, including finance leases | $ 783 | ||
Cumulative Effect, Period of Adoption, Adjustment | |||
Lessor, Lease, Description [Line Items] | |||
Prepaid expenses | $ (773) | ||
Operating right-of-use asset, net | 57,385 | ||
Finance right-of-use asset, net | 855 | ||
Deferred rent | (900) | ||
Short-term operating lease liability | 9,457 | ||
Short-term borrowings, including finance leases | 143 | ||
Long-term operating lease liability | 49,149 | ||
Long-term borrowings, including finance leases | $ 712 |
Leases - Summary of Finance and
Leases - Summary of Finance and Operating Lease Right-Of-Use Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating right-of-use asset, net | $ 45,741 | $ 0 |
Finance right-of-use asset, net | 852 | |
Total right-of-use assets | 46,593 | |
Short-term operating lease liability | 9,924 | 0 |
Long-term operating lease liability | 40,748 | $ 0 |
Short-term borrowings, including finance leases | 150 | |
Long-term borrowings, including finance leases | 783 | |
Total lease liabilities | $ 51,604 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property & equipment, net | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Short-term borrowings | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term borrowings |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 12,969 | |
Operating lease impairment | 3,846 | $ 0 |
Finance lease cost: | ||
Amortization of right-of-use assets | 258 | |
Interest on lease liabilities | 63 | |
Less: Sublease income | (194) | |
Total lease cost | $ 16,942 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 12,653 | |
2024 | 11,040 | |
2025 | 9,544 | |
2026 | 7,728 | |
2027 | 6,318 | |
2028 and thereafter | 13,442 | |
Total undiscounted lease payments | 60,726 | |
Less: present value adjustment | (10,054) | |
Total net lease liabilities | 50,672 | |
Finance Leases | ||
2023 | 200 | |
2024 | 184 | |
2025 | 170 | |
2026 | 159 | |
2027 | 152 | |
2028 and thereafter | 253 | |
Total undiscounted lease payments | 1,118 | |
Less: present value adjustment | (185) | |
Total net lease liabilities | $ 933 | $ 0 |
Leases - Lease Terms and Discou
Leases - Lease Terms and Discount Rates (Details) | Jan. 02, 2023 |
Weighted-average remaining lease term (in years) | |
Operating leases | 6 years 7 days |
Finance leases | 6 years 3 months 18 days |
Weighted-average discount rate | |
Operating leases | 6% |
Finance leases | 6.10% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for (Benefit) From Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Current: | ||
U.S. Federal | $ 0 | $ 0 |
State | 35 | 0 |
Total current income tax expense | 35 | 0 |
Deferred: | ||
U.S. Federal | (10,002) | (7,833) |
State | (1,469) | (2,192) |
Total deferred income tax benefit | (11,471) | (10,025) |
Valuation allowance | 11,341 | 10,337 |
Deferred income taxes | (130) | 312 |
Income tax benefit (expense) | $ (95) | $ 312 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision at the U.S. federal statutory rate | $ (21,741) | $ (25,407) |
Permanent differences | 870 | 402 |
Share-based compensation | (463) | 496 |
State income taxes, net of federal benefit | (1,640) | (1,888) |
Change in warrant liability | (527) | (2,900) |
Goodwill impairment | 11,471 | 19,820 |
True-up | 1,983 | 42 |
Change in valuation allowance | 11,342 | 10,337 |
Change in rate | (249) | (406) |
Tax credits | (1,141) | (184) |
Total income tax (benefit) expense | $ (95) | $ 312 |
Income Taxes (Successor) - Sche
Income Taxes (Successor) - Schedule of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 40 | $ 57 |
Goodwill | 4,625 | 2,794 |
Fixed Assets | 2,164 | 0 |
Deferred franchise fees | 277 | 684 |
Deferred rent | 0 | 239 |
Stock compensation | 1,730 | 1,250 |
Deferred payroll taxes | 0 | 217 |
Interest expense | 5,351 | 3,540 |
Lease liability | 13,104 | 0 |
Tax credits | 1,854 | 713 |
Other | 1,599 | 1,075 |
Gross deferred tax assets | 47,084 | 23,850 |
Valuation allowance | (22,629) | (11,383) |
Net deferred tax assets | 24,455 | 12,467 |
Intangible assets | (13,878) | (13,300) |
Lease ROU asset | (11,800) | 0 |
Fixed assets | 0 | (520) |
Deferred tax liabilities | (25,678) | (13,820) |
Total net deferred tax (liabilities) assets | (1,223) | (1,353) |
Federal | ||
Deferred tax assets: | ||
Net operating losses | 13,649 | 11,215 |
State and Local Jurisdiction | ||
Deferred tax assets: | ||
Net operating losses | $ 2,691 | $ 2,066 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Income Tax Textual [Line Items] | ||
Net operating losses | $ 64,900 | |
Valuation allowance | 22,629 | $ 11,383 |
State and Local Jurisdiction | ||
Income Tax Textual [Line Items] | ||
Net operating losses | 2,700 | |
Federal | ||
Income Tax Textual [Line Items] | ||
Net operating losses | $ 55,400 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 660 | $ 0 |
Additions based on tax positions related to the current year | 0 | 0 |
Additions for tax positions of prior years | 0 | 660 |
Reductions for positions of prior years | (431) | 0 |
Ending balance | $ 229 | $ 660 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Jan. 02, 2023 USD ($) store $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Jan. 05, 2023 $ / shares shares | Jan. 03, 2022 shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, shares, outstanding (in shares) | 22,257,772 | 21,303,500 | ||
Issuance of common stock (in shares) | 22,257,772 | 21,303,500 | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | |||
Preferred stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | |||
Preferred stock, shares issued (in shares) | 2,120,000 | 2,120,000 | ||
Preferred stock, shares outstanding (in shares) | 2,120,000 | 2,120,000 | ||
Warrants outstanding (in shares) | 15,063,800 | 15,063,800 | ||
Warrants exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | ||
UPO units that are exercisable (in shares) | 75,000 | 75,000 | ||
Number of UPO units exchanged (in shares) | 675,000 | |||
Number of shares in exchange for UPO units (in shares) | 283,669 | |||
Shares issued for warrants (in shares) | 100 | |||
Shares issued in cashless warrant exercises (in shares) | 7,969 | |||
Warrants exercisable period | 30 days | |||
Number of shares issued under purchase option (in shares) | 750,000 | |||
Number of common shares included in purchase of units (in shares) | 1 | |||
Number of warrant included in purchase of units (in shares) | 1 | |||
Shares purchase price, per share (in Dollars per share) | $ / shares | $ 10 | |||
Stock issued during period, shares, warrant exercised (in shares) | 7,969 | |||
Additional shares issued (in shares) | 1,065,175 | |||
Employee benefits and share-based compensation | $ | $ 10.2 | |||
Subsequent Event | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 | |||
Additional shares issued (in shares) | 1,112,889 | |||
Public Warrants | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Warrants outstanding (in shares) | 11,468,800 | 11,468,800 | ||
Warrants exercise price (in dollars per share) | $ / shares | $ 0.01 | |||
Prior written notice of redemption, period | 30 days | |||
Stock price trigger for redemption (in dollars per share) | $ / shares | $ 18 | |||
Number of trading days at or above trigger price | store | 20 | |||
Days included in redemption trading day period | store | 30 | |||
Private Placement | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Warrants outstanding (in shares) | 3,000,000 | 3,000,000 | ||
Private Warrants | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Warrants outstanding (in shares) | 445,000 | 445,000 | ||
Warrants exercise price (in dollars per share) | $ / shares | $ 0.05 | $ 0.75 | ||
Working Capital Warrants | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Warrants outstanding (in shares) | 150,000 | 150,000 | ||
2020 Omnibus Equity Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Aggregate number of shares to be issued under stock incentive plan (in shares) | 2,000,000 | |||
Stock option expiration period | 10 years | |||
Annual increase in number of shares available for issuance | 5% | |||
Common shares available for future grants (in shares) | 600,000 | 126,000 | ||
Restricted Shares | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Employee benefits and share-based compensation | $ | $ 6.4 | $ 7.6 | ||
Unrecognized compensation cost | $ | $ 11.9 | |||
Restricted Stock Units (RSUs) | Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense, weighted-average recognition period | 1 year 3 months 18 days | |||
Restricted Stock Units (RSUs) | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense, weighted-average recognition period | 2 years 9 months 18 days | |||
Market Condition | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ | $ 0.5 | |||
Unrecognized stock-based compensation expense, weighted-average recognition period | 1 year 3 months 10 days | |||
Share-based compensation | $ | $ 0.6 | 1.5 | ||
Performance Condition | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation | $ | 3.7 | 4.6 | ||
Share-based payment arrangement, additional expense due to modifications | $ | 0.2 | 0.1 | ||
Service Condition | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation | $ | 2.1 | $ 1.3 | ||
Stock Grants | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Employee benefits and share-based compensation | $ | $ 3.9 | |||
UPO Units Exercise Price One | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
UPO units exercise price (in dollars per share) | $ / shares | $ 10 | $ 10 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Activity of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Jan. 02, 2023 $ / shares shares | |
Number of Restricted Stock Units | |
Non-vested at December 31, 2020 (in shares) | shares | 1,783,698 |
Granted (in shares) | shares | 587,847 |
Vested (in shares) | shares | (477,799) |
Forfeited (in shares) | shares | (448,146) |
Non-vested at December 31, 2021 (in shares) | shares | 1,445,600 |
Weighted Average Grant Date Fair Value | |
Non-vested at December 31, 2020 (in dollars per shares) | $ / shares | $ 14.18 |
Granted (in dollars per share) | $ / shares | 4.55 |
Vested (in dollars per share) | $ / shares | 13.08 |
Forfeited (in dollars per share) | $ / shares | 10.85 |
Non-vested at December 31, 2021 (in dollars per shares) | $ / shares | $ 11.68 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Input Variables (Details) - Performance Condition | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate, minimum | 0.40% | |
Risk-free interest rate, maximum | 4.10% | |
Risk-free interest rate | 1.03% | |
Expected life in years | 2 years | 3 years |
Expected volatility, minimum | 57.30% | |
Expected volatility, maximum | 65.90% | |
Expected volatility | 65.90% | |
Expected dividend yield | 0% | 0% |
Stockholders' Equity - Activity
Stockholders' Equity - Activity of the Restricted Stock Units During 2021 by Award Type (Details) | 12 Months Ended |
Jan. 02, 2023 $ / shares shares | |
Performance Condition | |
Restricted Stock Units | |
Non-vested at December 31, 2020 (in shares) | shares | 1,251,698 |
Granted (in shares) | shares | 282,000 |
Vested (in shares) | shares | (241,952) |
Forfeited (in shares) | shares | (240,646) |
Non-vested at December 31, 2021 (in shares) | shares | 1,051,100 |
Weighted Average Grant Date Fair Value | |
Non-vested at December 31, 2020 (in dollars per share) | $ / shares | $ 15.15 |
Granted (in dollars per share) | $ / shares | 4.12 |
Vested (in dollars per share) | $ / shares | 15.14 |
Forfeited (in dollars per share) | $ / shares | 13.14 |
Non-vested at December 31, 2021 (in dollars per share) | $ / shares | $ 12.62 |
Service Condition | |
Restricted Stock Units | |
Non-vested at December 31, 2020 (in shares) | shares | 252,000 |
Granted (in shares) | shares | 115,847 |
Vested (in shares) | shares | (205,847) |
Forfeited (in shares) | shares | 0 |
Non-vested at December 31, 2021 (in shares) | shares | 162,000 |
Weighted Average Grant Date Fair Value | |
Non-vested at December 31, 2020 (in dollars per share) | $ / shares | $ 15.79 |
Granted (in dollars per share) | $ / shares | 6.26 |
Vested (in dollars per share) | $ / shares | 11.33 |
Forfeited (in dollars per share) | $ / shares | 0 |
Non-vested at December 31, 2021 (in dollars per share) | $ / shares | $ 14.65 |
Market Condition | |
Restricted Stock Units | |
Non-vested at December 31, 2020 (in shares) | shares | 280,000 |
Granted (in shares) | shares | 190,000 |
Vested (in shares) | shares | (30,000) |
Forfeited (in shares) | shares | (207,500) |
Non-vested at December 31, 2021 (in shares) | shares | 232,500 |
Weighted Average Grant Date Fair Value | |
Non-vested at December 31, 2020 (in dollars per share) | $ / shares | $ 8.42 |
Granted (in dollars per share) | $ / shares | 4.13 |
Vested (in dollars per share) | $ / shares | 8.41 |
Forfeited (in dollars per share) | $ / shares | 8.20 |
Non-vested at December 31, 2021 (in dollars per share) | $ / shares | $ 5.34 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term borrowings | $ 53,794 | $ 56,797 |
Share price (in dollars per share) | $ 1.26 | $ 5.67 |
Warrants exercise price | $ 11.50 | 11.50 |
Credit Agreement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of long-term debt | $ 53,200 | |
Long-term borrowings | $ 58,500 | |
Private Warrants | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrants exercise price | $ 0.05 | $ 0.75 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Hierarchy (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | $ 195 | $ 2,706 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 0 | 0 |
Total | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 195 | |
Total | 195 | 0 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 0 | 2,706 |
Total | $ 0 | $ 2,706 |
Fair Value Measurements - Black
Fair Value Measurements - Black Scholes Measurement Inputs (Details) | Jan. 02, 2023 yr | Dec. 31, 2021 yr |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.0414 | 0.0111 |
Expected life in years | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 3 | 3.96 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.680 | 0.418 |
Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0 | 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) - Segment | 10 Months Ended | 12 Months Ended |
Nov. 03, 2021 | Jan. 02, 2023 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 1 | 2 |
Number of reportable segments | 1 | 2 |
Segment Information - Summary o
Segment Information - Summary of Financial Statement Data by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2023 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 178,720 | $ 68,867 |
Capital expenditures | 2,517 | 10,665 |
Depreciation and amortization expense | 17,138 | 10,060 |
Pre-opening costs | 474 | 1,905 |
Interest expense | 8,659 | 1,406 |
Net loss | (103,432) | (121,494) |
BurgerFi | ||
Segment Reporting Information [Line Items] | ||
Revenue | 49,901 | 46,448 |
Capital expenditures | 1,428 | 10,348 |
Depreciation and amortization expense | 9,571 | 8,694 |
Pre-opening costs | 474 | 1,905 |
Interest expense | 3,843 | 673 |
Net loss | (50,375) | (121,352) |
Anthony's | ||
Segment Reporting Information [Line Items] | ||
Revenue | 128,819 | 22,419 |
Capital expenditures | 1,090 | 317 |
Depreciation and amortization expense | 7,567 | 1,366 |
Pre-opening costs | 0 | 0 |
Interest expense | 4,816 | 733 |
Net loss | $ (53,057) | $ (142) |
Segment Information - Assets by
Segment Information - Assets by Segment (Details) - USD ($) $ in Thousands | Jan. 02, 2023 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total assets: | $ 276,780 | $ 317,719 |
BurgerFi | ||
Segment Reporting Information [Line Items] | ||
Total assets: | 136,811 | 161,675 |
Anthony's | ||
Segment Reporting Information [Line Items] | ||
Total assets: | $ 139,969 | $ 156,044 |