Cover
Cover - USD ($) | 12 Months Ended | ||
Jan. 01, 2024 | Apr. 05, 2024 | Jul. 03, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --01-01 | ||
Document Period End Date | Jan. 01, 2024 | ||
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 | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 29,524,449 | ||
Entity Common Stock, Shares Outstanding | 27,042,213 | ||
Entity Central Index Key | 0001723580 | ||
Document Fiscal Year Focus | 2023 | ||
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 $11.50 per share | ||
Trading Symbol | BFIIW | ||
Security Exchange Name | NASDAQ |
Audit Information
Audit Information | 12 Months Ended |
Jan. 01, 2024 | |
Audit Information [Abstract] | |
Auditor Firm ID | 185 |
Auditor Name | KPMG LLP |
Auditor Location | Miami, Florida |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Current Assets | ||
Cash and cash equivalents | $ 7,556 | $ 11,917 |
Accounts receivable, net | 1,368 | 1,926 |
Inventory | 1,190 | 1,320 |
Asset held for sale | 732 | 732 |
Prepaid expenses and other current assets | 1,654 | 2,564 |
Total Current Assets | 12,500 | 18,459 |
Property & equipment, net | 16,121 | 19,371 |
Operating right-of-use assets, net | 46,052 | 45,741 |
Goodwill | 31,621 | 31,621 |
Intangible assets, net | 150,856 | 160,208 |
Other assets | 1,326 | 1,380 |
Total Assets | 258,476 | 276,780 |
Current Liabilities | ||
Accounts payable - trade and other | 7,093 | 8,464 |
Accrued expenses | 8,537 | 10,589 |
Short-term operating lease liability | 10,111 | 9,924 |
Other liabilities | 4,117 | 6,241 |
Short-term borrowings, including finance leases | 52,834 | 4,985 |
Total Current Liabilities | 82,692 | 40,203 |
Non-Current Liabilities | ||
Long-term borrowings and Related party note payable | 16,206 | 63,029 |
Redeemable preferred stock, $0.0001 par value, 10,000,000 shares authorized, 2,120,000 shares issued and outstanding, as of January 1, 2024 and January 2, 2023, $53 million principal redemption value | 55,629 | 51,418 |
Long-term operating lease liability | 44,631 | 40,748 |
Warrant liability | 182 | 195 |
Other non-current liabilities | 740 | 1,017 |
Deferred income taxes | 1,146 | 1,223 |
Total Liabilities | 201,226 | 197,833 |
Commitments and Contingencies - Note 7 | ||
Stockholders' Equity | ||
Common stock, $0.0001 par value, 100,000,000 shares authorized, 26,832,691 and 22,257,772 shares issued and outstanding as of January 1, 2024 and January 2, 2023, respectively | 2 | 2 |
Additional paid-in capital | 315,107 | 306,096 |
Accumulated deficit | (257,859) | (227,151) |
Total Stockholders' Equity | 57,250 | 78,947 |
Total Liabilities and Stockholders' Equity | 258,476 | 276,780 |
Nonrelated Party | ||
Non-Current Liabilities | ||
Long-term borrowings and Related party note payable | 1,718 | 53,794 |
Related Party | ||
Non-Current Liabilities | ||
Long-term borrowings and Related party note payable | $ 14,488 | $ 9,235 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jan. 01, 2024 | Jan. 02, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 2,120,000 | 2,120,000 |
Preferred stock, shares outstanding (in shares) | 2,120,000 | 2,120,000 |
Preferred stock, redemption value | $ 53 | $ 53 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 26,832,691 | 26,832,691 |
Common stock, shares, outstanding (in shares) | 26,832,691 | 22,257,772 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Revenue: | ||
Restaurant sales | $ 160,833 | $ 167,201 |
Total Revenue | 170,100 | 178,720 |
Restaurant level operating expenses: | ||
Food, beverage and paper costs | 42,858 | 48,487 |
Labor and related expenses | 50,289 | 49,785 |
Other operating expenses | 29,888 | 30,277 |
Occupancy and related expenses | 15,656 | 15,607 |
General and administrative expenses | 22,477 | 25,907 |
Depreciation and amortization expense | 13,154 | 17,138 |
Share-based compensation expense | 5,612 | 10,239 |
Brand development, co-op and advertising expense | 4,233 | 3,870 |
Goodwill impairment | 0 | 66,569 |
Asset impairment | 4,524 | 6,946 |
Store closure costs | 587 | 1,949 |
Restructuring costs | 2,657 | 1,459 |
Pre-opening costs | 203 | 474 |
Operating Loss | (22,038) | (99,987) |
Other income, net | 80 | 2,608 |
Gain on change in value of warrant liability | 13 | 2,511 |
Interest expense, net | (8,828) | (8,659) |
Loss before Income Taxes | (30,773) | (103,527) |
Income tax benefit | 65 | 95 |
Net Loss | $ (30,708) | $ (103,432) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 25,521,098 | 22,173,694 |
Diluted (in shares) | 25,521,098 | 22,173,694 |
Net Loss per common share: | ||
Basic (in shares) | $ (1.20) | $ (4.66) |
Diluted (in shares) | $ (1.20) | $ (4.66) |
Royalty and other fees | ||
Revenue: | ||
Other revenues | $ 7,492 | $ 9,733 |
Royalty - brand development and co-op | ||
Revenue: | ||
Other revenues | $ 1,775 | $ 1,786 |
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, 2021 | 21,303,500 | ||||
Balance at beginning 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) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued in private placement (in shares) | 2,868,853 | ||||
Shares issued in private placement | 3,436 | 3,436 | |||
Share-based compensation | 5,612 | 5,612 | |||
Vested shares issued (in shares) | 1,798,653 | ||||
Shares issued legal settlement (in shares) | 200,000 | ||||
Shares issued in legal settlement | 352 | 352 | |||
Shares withheld for taxes (in shares) | (292,587) | ||||
Shares withheld for taxes | (389) | (389) | |||
Net loss | (30,708) | (30,708) | |||
Balance at end of period (in shares) at Jan. 01, 2024 | 26,832,691 | ||||
Balance at end of period at Jan. 01, 2024 | $ 57,250 | $ 2 | $ 315,107 | $ (257,859) | |
[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. 01, 2024 | Jan. 02, 2023 | |
Cash Flows (Used In) Provided By Operating Activities | ||
Net loss | $ (30,708) | $ (103,432) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Goodwill impairment | 0 | 66,569 |
Asset impairment | 4,524 | 6,946 |
Depreciation and amortization | 13,154 | 17,138 |
Share-based compensation | 5,612 | 10,239 |
Gain on legal settlement | (619) | 0 |
Forfeited franchise deposits | (418) | (1,481) |
Gain on change in value of warrant liability | (13) | (2,511) |
Total deferred income tax benefit, net of valuation allowance | (78) | (130) |
Other non-cash interest | 4,884 | 4,457 |
Other, net | (228) | 892 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 570 | (268) |
Inventory | 152 | 67 |
Prepaid expenses and other assets | 924 | (499) |
Accounts payable - trade and other | (1,885) | 224 |
Accrued expenses and other current liabilities | (1,404) | 3,576 |
Other long-term liabilities | 150 | 381 |
Net Cash Flows (Used In) Provided By Operating Activities | (5,383) | 2,168 |
Net Cash Flows From Investing Activities | ||
Purchases of property and equipment | (2,503) | (2,517) |
Proceeds from sale of property and equipment | 936 | 1,087 |
Other investing activities | 0 | (119) |
Net Cash Flows Used In Investing Activities | (1,567) | (1,549) |
Net Cash Flows From Financing Activities | ||
Proceeds from issuance of common stock | 3,436 | 0 |
Proceeds from borrowings | 0 | 1,500 |
Payments on borrowings | (5,333) | (3,339) |
Proceeds from related party note payable | 5,100 | 0 |
Tax payments for restricted stock upon vesting | (389) | (1,089) |
Debt issuance cost | (57) | (486) |
Repayments of finance leases | (168) | (177) |
Net Cash Flows Provided By (Used In) Financing Activities | 2,589 | (3,591) |
Net Decrease in Cash and Cash Equivalents | (4,361) | (2,972) |
Cash and Cash Equivalents, beginning of year | 11,917 | 14,889 |
Cash and Cash Equivalents, end of year | 7,556 | 11,917 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 3,459 | 2,884 |
Fair value of net liabilities assumed in legal settlement | (79) | 0 |
Fair value of common stock issued in legal settlement | 352 | 0 |
ROU assets obtained in the exchange for lease liabilities: | ||
Finance leases | 758 | 1,078 |
Operating leases | 9,984 | 2,260 |
ROU liabilities reduced in exchange for lease terminations | 192 | 0 |
Cash paid for income taxes | $ 5 | $ 1 |
Organization
Organization | 12 Months Ended |
Jan. 01, 2024 | |
Accounting Policies [Abstract] | |
Organization | 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, Puerto Rico and Saudi Arabia. As of January 1, 2024, the Company had 168 franchised and corporate-owned restaurants of the two following brands: BurgerFi . BurgerFi is a fast-casual “better burger” concept with 108 franchised and corporate-owned restaurants as of January 1, 2024, 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 with 60 restaurants including 59 corporate-owned and one franchise location co-branded with BurgerFi as of January 1, 2024 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 01, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies 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 substantial doubt about the Company’s ability to continue as a going concern existed as of January 1, 2024 as a result of non-compliance of the Company’s liquidity covenant within the Company’s Credit Agreement. The Company’s credit agreement (“Credit Agreement”) with a syndicate of banks has approximately $53.3 million in financing outstanding as of January 1, 2024, and expires on September 30, 2025. The Credit Agreement contains various covenants, including requirements for the Company to meet certain trailing twelve-month quarterly financial ratios and a minimum liquidity threshold. As of January 1, 2024, the Company was not in compliance with the minimum liquidity requirement of the Credit Agreement, which constitutes a breach of the Credit Agreement and an event of default. Accordingly, the outstanding balance of the Credit Agreement is included in short-term borrowings together with the short term portion outstanding balance under its finance leases on the accompanying consolidated balance sheets. This event of default entitles the lenders to call the debt sooner than its maturity date of September 30, 2025. The Company does not have and is not forecasted to have the readily available funds to repay the debt if called by the lenders. The Company has been actively engaged in discussions with its lenders to explore potential solutions regarding the default event and its resolution. We cannot, however, predict the results of any such negotiations. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. See Note 9, “ Debt ,” for additional disclosure surrounding the amended Credit Agreement. 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 years 2023 and 2022 ended on January 1, 2024 and January 2, 2023, respectively. Reclassifications Certain amounts for general and administrative expense, and other income, have been reclassified within the consolidated statements of operations for the year ended January 2, 2023 and are comparable to the year ended January 1, 2024. 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 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 and January 1, 2024 and January 2, 2023 is as follows: 2023 2022 Corporate-owned Franchised Total Corporate-owned Franchised Total Total BurgerFi and Anthony's 87 81 168 85 89 174 BurgerFi stores, beginning of the period 25 89 114 25 93 118 BurgerFi stores opened — 8 8 3 8 11 BurgerFi stores transferred/sold 4 (4) — (3) 3 — BurgerFi stores closed (1) (13) (14) — (15) (15) BurgerFi total stores, end of the period 28 80 108 25 89 114 Anthony's stores, beginning of period / acquired 60 — 60 61 — 61 Anthony's stores opened — 1 1 — — — Anthony's stores closed (1) — (1) (1) — (1) Anthony's total stores, end of the period 59 1 60 60 — 60 End of year store totals included one international store for both fiscal years ended January 1, 2024 and January 2, 2023, 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 $1.9 million and $2.4 million as of January 1, 2024 and January 2, 2023, 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 and 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 $0.1 million at January 1, 2024 and $0.2 million at January 2, 2023. 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 ”). 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. During the fiscal year ended January 1, 2024, we assumed $0.4 million in ERC receivables as part of the John Rosatti settlement agreement disclosed in Note 7, “ Commitments and Contingencies, ” and during the fiscal year ended January 2, 2023, $2.6 million, net of third party preparation fees, in other income, net related to ERC. The Company has collected $3.0 million on ERC receivables through January 1, 2024. 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. Assets Held for Sale 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. The closing of this transaction has been delayed due to additional on-going negotiations. In the event the transaction is terminated, the Company will begin operating this BurgerFi restaurant, and return the deposit of $0.9 million included in other current assets 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 accompanying consolidated balance sheets as of January 1, 2024 and January 2, 2023. Property and Equipment, net Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is provided by the straight-line method over an estimated useful life as shown below: Years Leaseholder Improvements Shorter of lease term or life of asset Kitchen equipment and other equipment 5 - 7 Computers and office equipment 3 - 5 Furniture and fixtures 5 - 7 Vehicles 5 - 7 Maintenance and repairs which are not considered to extend the useful lives of the assets are charged to operations as incurred. Expenditures for additions and improvements are capitalized. Expenditures for renewals and betterments, which materially extend the useful lives of assets or increase their productivity, are capitalized. The Company capitalizes construction costs during construction of the restaurant and will begin to depreciate them once the restaurant is placed in service. Wage costs directly related to and incurred during a restaurant’s construction period are capitalized. Interest costs incurred during a restaurant’s construction period are capitalized. Upon sale or retirement, the cost of assets and related accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are included in other income (loss) on the Company’s consolidated statements of operations. 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 as shown below: Years Franchise agreements 7 Trade names 30 License agreements 2 VegiFi product 10 Right of use assets 5 - 10 Refer to Note 10, “ Leases ”, for additional disclosures 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 impairment charges of approximately $4.5 million for the year ended January 1, 2024, of which $1.8 million related to property and equipment, $2.6 million related to right-of-use assets, and $0.1 million related to intangible assets, all of which is included in asset impairment on our consolidated statements of operations. 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 and equipment and $3.8 million related to right-of-use assets which is included in asset impairment on our consolidated statements of operations. Goodwill and Indefinite-Lived Intangible Assets The Company accounts for goodwill and indefinite-lived intangible assets in accordance with Financial Accounting Standards Board “ FASB ” Accounting Standards Codification (“ ASC ”) No. 350, “ Intangibles—Goodwill and Other ” (“ A SC 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 annual goodwill impairment test performed for the year ended January 1, 2024, it determined that goodwill was not impaired. For the year ended January 2, 2023, the Company recorded goodwill impairment charges of approximately $66.6 million. Refer to Note 5, “ Impairment ,” for additional information. The following table represents changes to the Company's goodwill balances during the years ended January 1, 2024 and January 2, 2023 : Reporting Unit (in thousands) BurgerFi Anthony's Total Goodwill Balance at December 31, 2021 $ 17,505 $ 80,495 $ 98,000 Adjustment to goodwill acquired — 190 190 Impairment loss (17,505) (49,064) (66,569) Balance at January 2, 2023 and January 1, 2024 $ — $ 31,621 $ 31,621 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 $5.8 million and $6.7 million as of January 1, 2024 and January 2, 2023, respectively, and are included in intangible assets, net on its consolidated balance sheets. During the year ended January 1, 2024, the Company recognized the following related to the Anthony’s liquor license intangible assets: (i) a gain of $0.1 million, which is included in other income, net, in its consolidated statements of operations from the sale of a liquor license intangible asset for one of its closed Anthony’s locations with a book value of $0.8 million; and (ii) an asset impairment charge of $0.1 million as part of its annual impairment test, which is included in asset impairment For the year ended January 2, 2023, there were no asset impairment charges recorded related to the Company’s liquor licenses. Refer to Note 4, “ Intangible Assets, ” for additional information. Deferred Financing Costs Deferred financing costs relate to the Company’s debt instruments, 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 1, 2024 and January 2, 2023, the Company deferred $0.1 million and $0.9 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 each of the years ended January 1, 2024 and January 2, 2023. 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 or market conditions, in which case the Company recognizes compensation expense over the requisite service period to the extent the conditions are considered probable. Forfeitures are recognized as they occur. The Company determines 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 restricted stock unit awards with performance conditions ( “PSU 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 periods shown consist of the following: (in thousands) Year Ended January 1, 2024 Year Ended Expenses related to financing $ 1,168 $ 660 Severance and onboarding costs associated with change in CEO and CFO 1,489 799 Total $ 2,657 $ 1,459 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) 2,562,550 shares of restricted stock unit grants in the calculation of net loss per common share, and (3) the impact of any dividends associated with its redeemable preferred stock, and such items have not been included in the calculation of net loss per common share as the effect of such items would have been 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 1, 2024 Year Ended Numerator: Net loss available to common stockholders $ (30,708) $ (103,432) Denominator: Weighted-average shares outstanding, basic and diluted 25,521,098 22,173,694 Basic and diluted net loss per common share $ (1.20) $ (4.66) 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 years ended January 1, 2024 and January 2, 2023. As of January 1, 2024, the Company had two main in-line distributors of food, packaging and beverage products that provided approximately 89% of the Company's restaurants purchasing of those products in the United States. 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 our requirements. However, if a disruption of service from any of our 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 19 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 1, 2024 and January 2, 2023 are as follows: (in thousands) Year Ended January 1, 2024 Year Ended Franchising receivables $ 137 $ 168 Gift card liability $ 2,205 $ 1,847 Unearned revenue, current $ 19 $ 84 Unearned revenue, long-term $ 726 $ 1,008 Franchise Revenue Revenue recognized during the years ended are as follows: (in thousands) Year ended January 1, 2024 Year Ended January 2, 2023 Franchise Fees $ 613 $ 1,806 An analysis of unearned revenue is as follows: (in thousands) Year ended January 1, 2024 Year Ended January 2, 2023 Balance, beginning of period $ 1,092 $ 2,577 Initial/Transfer franchise fees received 265 364 Revenue recognized for stores open and transfers during period (137) (325) Revenue recognized related to franchise agreement terminations (418) (1,481) Other unearned revenue (recognized) received (57) (43) Balance, end of period $ 745 $ 1,092 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 $0.8 million and $1.0 million at January 1, 2024 and January 2, 2023, 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 1, 2024 and January 2, 2023 was $1.2 million and $2.4 million, respectively and is 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. 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 1, 2024 , the Company had brand development royalties of approximately $1.4 million and brand development expenses of approximately $2.7 million. For the year ended January 2, 2023, the Company had brand development royalties of approximately $1.4 million and approximately $1.8 million 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 1, 2024, the Company had advertising co-op royalties of approximately $0.4 million and advertising co-op expenses of approximately $0.7 million. For the year ended January 2, 2023, the Company had advertising co-op royalties of approximately $0.4 million and approximately $0.8 million of advertising co-op expenses. 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. Pre-opening costs expensed for the years ended January 1, 2024 and January 2, 2023 were $0.2 million and $0.5 million, respectively. 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 Accounting Standards Codification Topic 842 “ |
Property & Equipment
Property & Equipment | 12 Months Ended |
Jan. 01, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property & Equipment | Property & Equipment Property and equipment consisted of the following: (in thousands) January 1, 2024 January 2, 2023 Leasehold improvements $ 17,579 $ 17,029 Kitchen equipment and other equipment 8,708 8,196 Computers and office equipment 1,536 1,468 Furniture and fixtures 2,828 2,677 Vehicles 8 37 30,659 29,407 Less: Accumulated depreciation and amortization (14,538) (10,036) Property & equipment – net $ 16,121 $ 19,371 Depreciation expense for the years ended January 1, 2024 and January 2, 2023 was $4.7 million and $8.7 million, respectively . 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 $1.8 million and $3.1 million of property and equipment impairment during the years ended January 1, 2024 and January 2, 2023, respectfully. Refer to Note 5, “ Impairment, |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Jan. 01, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net The following is a summary of the components of intangible assets and the related amortization expense and impairment charges: January 1, 2024 (in thousands) Weighted Average Remaining Useful Life (years) Amount Accumulated Amortization Accumulated Impairment Charges Net Carrying Value Franchise agreements 4.0 $ 24,839 $ (10,793) $ — 14,046 BurgerFi trade names / trademarks 27.0 83,033 (8,419) — 74,614 Anthony's trade names / trademarks 27.8 60,690 (4,383) — 56,307 Other intangibles 7.0 9,018 (1,241) (7,706) 71 Subtotal 177,580 (24,836) (7,706) 145,038 Liquor licenses $5,930 — (113) 5,818 Total intangible assets, net $ 183,510 $ (24,836) $ (7,818) $ 150,856 January 2, 2023 (in thousands) Weighted Average Remaining Useful Life (years) Amount Accumulated Amortization Accumulated Impairment Charges Net Carrying Value Franchise agreements 5.0 $ 24,839 $ (7,244) $ — $ 17,595 BurgerFi trade names / trademarks 28.0 83,033 (5,650) — 77,383 Anthony's trade names / trademarks 28.8 60,690 (2,359) — 58,331 Other intangibles 8.0 9,018 (1,091) (7,706) 221 Subtotal 177,580 (16,344) (7,706) 153,530 Liquor licenses 6,678 — 6,678 Total intangible assets, net $ 184,258 $ (16,344) $ (7,706) $ 160,208 The following presents information about the Company’s goodwill on the dates indicated: (in thousands) Anthony’s Segment BurgerFi Segment Total Balance as of December 31, 2021 Goodwill $ 80,684 $ 123,981 $ 204,665 Accumulated impairment losses (49,064) (123,981) (173,045) Goodwill, net as of January 2, 2023 $ 31,621 $ — $ 31,621 Goodwill $ 80,684 $ 123,981 $ 204,665 Accumulated impairment losses (49,064) $ (123,981) (173,045) Goodwill, net as of January 1, 2024 $ 31,621 $ — $ 31,621 The Anthony’s liquor licenses are considered to have an indefinite life, and in addition to the Company's definite-lived intangible assets, are 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. During the year ended January 1, 2024, the Company recognized $0.1 million in gain on sale of assets in other income, net For the year ended January 1, 2024, we recorded $0.1 million of impairment charges related to these license agreements; there were no impairment charges recorded for the year ended January 2, 2023. See Note 5, “ Impairment ,” for further information. Amortization expense for each of the years ended January 1, 2024 and January 2, 2023 was $8.5 million. The estimated aggregate amortization expense for intangible assets over the next five fiscal years and thereafter is as follows: (in thousands) 2024 $ 8,353 2025 8,353 2026 8,353 2027 8,205 2028 4,804 Thereafter 106,970 Total $ 145,038 |
Impairment
Impairment | 12 Months Ended |
Jan. 01, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment | Impairment The Company recognized non-cash impairment charges of approximately $4.5 million during the year ended January 1, 2024 and $73.5 million for the year ended January 2, 2023. This consisted of the following: (in thousands) Year Ended January 1, 2024 Year Ended Goodwill $ — $ 66,569 Indefinite-lived intangible assets 113 — Long-lived assets 1,794 3,100 Right-of-use assets 2,617 3,846 Total non-cash impairment charge $ 4,524 $ 73,515 Based on the results of the Company’s annual goodwill impairment tests for the year ended January 1, 2024, the Company determined that goodwill was not impaired for the Anthony's and BurgerFi reporting units; accordingly, the Company recorded no goodwill impairment charges. The Company reviewed the sensitivity of its goodwill impairment test assumptions noting that a 1% increase in its discount rate and a 5% decrease in cash flows would not cause an impairment of its Anthony’s goodwill for the year ended January 1, 2024. Based on the results of the Company’s interim and annual goodwill impairment tests for the year ended January 2, 2023, the Company determined that its goodwill was impaired for the Anthony’s and BurgerFi reporting units. Accordingly, for the BurgerFi reporting unit, the Company recorded a goodwill impairment charge of approximately $17.5 million; there was no remaining carrying value of the BurgerFi goodwill at January 2, 2023. We also recognized an impairment charge for Anthony’s reporting unit’s goodwill for the year ended January 2, 2023 of $49.1 million. As part o f the annual impairment review of indefinite-lived intangible assets, the Company recorded an impairment charge of $0.1 million for the year ended January 1, 2024, related to the Anthony’s liquor licenses; there were no impairment charges recorded for indefinite-lived intangible assets for the year ended January 2, 2023. 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 and equipment at certain underperforming corporate-owned restaurants were impaired at the BurgerFi and Anthony’s reporting units. F or the year ended January 1, 2024, the Company recorded impairment charges of approximately $3.3 million for the BurgerFi reporting unit, and $1.2 million for the Anthony’s reporting unit. F or the year ended January 2, 2023, the Company recorded impairment charges of approximately $6.7 million for the BurgerFi reporting unit, and $0.2 million for the Anthony’s reporting unit.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 for its 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. 01, 2024 | |
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. During 2023, these amounts due were settled as a result of the John Rosatti settlement agreement disclosed in Note 7, “ Commitments and Contingencies, ”. These advances were unsecured and non-interest bearing. The fair value of consideration paid in the John Rosatti settlement was $0.9 million and included $0.5 million in cash and the issuance of 200,000 shares of Company common stock valued at $0.4 million. The fair value of net liabilities assumed in the transaction was $0.1 million which included lease liabilities and operating assets and liabilities including property and equipment of two stores, net of pre-existing liabilities accrued. There was no amount due from related companies as of January 1, 2024; there was $0.3 million of amounts due from related companies as of January 2, 2023 in other assets on the Company’s consolidated balance sheets. For the year ended January 2, 2023, the Company received royalty revenue from the two operating stores that were transferred on January 23, 2023 as a result of the settlement with the significant stockholder totaling approximately $0.1 million. The Company leased building space for its former corporate office from an entity under common ownership with a significant stockholder. This lease had a 36 month term, effective January 1, 2020. In January 2022, the Company exercised its right to terminate this lease effective as of July 2022. There was no rent expense the year ended January 1, 2024; for the year ended January 2, 2023, rent expense was approximately $0.1 million. The Company leases building space for its corporate office from an entity controlled by the Company’s Executive Chairman of the Board (the “ Executive Chairman ”). In February 2022, the Company amended this lease agreement to, among other things, (1) extend the term to 10 years beginning March 1, 2022 and expiring in 2032, and (2) expand its square footage from approximately 16,500 square feet to approximately 18,500 square feet. For the years ended January 1, 2024 and January 2, 2023, rent expense was approximately $0.7 million and $0.5 million, respectively. The Company had independent contractor agreement with a corporation (the “ Consultant ”) for which the Chief Operating Officer (the “ Consultant Principal ”) of Lionheart Capital, LLC, an entity controlled by the Company’s Executive Chairman, serves as President. Pursuant to the terms of the agreements, the Consultant provided certain strategic advisory services to the Company in exchange for total annual cash compensation and expense reimbursements of $0.1 million, payable monthly. Cash compensation for the Consultant Principal was $0.1 million for each of the years ended January 1, 2024 and January 2, 2023. The engagement ended in September of 2023. On January 3, 2023 the Company awarded the Consultant Principal a $0.1 million bonus in connection with the Company’s amendment and extension of its Credit Facility and granted the Consultant Principal 38,000 unrestricted shares of common stock of the Company. On January 3, 2022, the Company granted the Consultant Principal approximately 38,000 unrestricted shares of common stock of the Company. The Company recorded share-based compensation of $0.2 million for the year ended January 1, 2024, and $0.4 million for the year ended January 2, 2023. On February 24, 2023, the Company entered into a note payable with an affiliate of a significant stockholder for $5.1 million in debt proceeds, and $10.0 million in assumption of existing term loan amounts. See Note 9, “ Debt ”, for further information. On June 3, 2023, the Company entered into a stock purchase agreement with an investing entity for the sale of 2,868,853 shares of Company common stock at an issuance price of $1.22 per share for total proceeds of $3.4 million. Upon the execution of this agreement, the investing entity became a holder of approximately 11% of the Company’s outstanding common stock. During the year ended January 1, 2024, the Company entered into four franchise agreements with an affiliate of this entity. The Company received royalty revenue from such franchises related to a significant stockholder totaling approximately $0.1 million for the year ended January 1, 2024. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 01, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation 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 $26.0 million In November 2022, as amended in February 2023, the Company filed its answer to the complaint. On April 13, 2023, Lion Point filed a Motion for Summary Judgment, and the Company responded with its reply on June 22, 2023. On October 12, 2023, the Court granted Lion Point’s Motion for Summary Judgment and set a status conference for November 15, 2023 to begin the damages phase of the case. At the November 15, 2023 status conference, the Court set out a schedule for discovery and trial, which schedule is in the process of being amended by counsel for both parties to allow for additional time for settlement discussions. The Company 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 these proceedings; any losses, however, may be material to the Company's financial position and results of operations. John Walker, Individually and On Behalf of all Other Similarly Situated v. BurgerFi International, Inc. et al (in the United States District Court, Southern District of Florida, Case No. 023-cv-60657). On April 6, 2023, John Walker, on behalf of himself and other similarly situated plaintiffs, filed a class action lawsuit against the Company and certain current and former executives alleging that the Company violated certain securities laws by making false and misleading statements or failed to disclose that (1) the Company had overstated the effectiveness of its acquisition and growth strategies, and (2) the Company had misrepresented the purported benefits of the Anthony’s acquisition and the post-acquisition business and financial prospects of the Company. On July 20, 2023, the court appointed John Walker and Joseph Poalino as co-lead plaintiffs in the matter. On September 5, 2023, an Order of Dismissal without prejudice was signed. Therefore, no contingent liability has been recorded as of January 1, 2024. 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 82nd SM, LLC (“ Landlord ”) against BF NY 82, LLC (“ Tenant ”) whereby Landlord brought a 7 -count lawsuit for, among other things, breach of the lease agreement and underlying guaranty of the lease. The amount of damages Landlord was seeking was approximately $1.5 million, which constituted 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 Company turned over possession of the property in early 2023. On July 5, 2023, the Landlord filed a Motion for Summary Judgment seeking approximately $1.2 million in past due rent payments. On August 14, 2023, the Court entered an order granting the Landlord’s Motion for Summary Judgment and ordered a damages hearing on the motion. On October 2, 2023 a settlement agreement was executed by all parties and the parties filed a stipulation of dismissal with prejudice on October 6, 2023. Burger Guys of Dania Pointe, et. al. v. BFI, LLC (Circuit Court of the 15th 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 $2.0 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. On November 5, 2023, the parties attended mediation, which ended in an impasse. Depositions are ongoing and a trial has been set for April 15, 2024. 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 case described above, and, therefore, no contingent liability has been recorded as of January 1, 2024 ; 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”) alleged breach of contract and lost profits in excess of $1.0 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 asserted, 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 several additional court ordered mediations over several months to attempt to resolve the dispute. No resolution was reached in such mediations. However, the court entered an order to dismiss the case with prejudice on August 15, 2023; therefore, no contingent liability has been recorded as of January 1, 2024. 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 $10.0 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. 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 minimis cash amount relating solely to the discrimination claim, the other claims remain. In March 2020, the Company received notification of a U.S. Equal Employment Opportunity Commission (the “EEOC”) complaint claiming sexual harassment and assault. On July 5, 2023, the EEOC issued a determination letter declining to investigate the matter further and issued a right to sue letter. On September 29, 2023, the claimant filed a lawsuit. The suit is in the early stages and the Company is currently working through initial responses. 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 $0.5 million 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 1, 2024, the Company has $5.7 million in conditional purchase obligations over the next 12 months. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 12 Months Ended |
Jan. 01, 2024 | |
Other Liabilities Disclosure [Abstract] | |
Redeemable Preferred Stock | Redeemable 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 1, 2024 and January 2, 2023, there were 2,120,000 shares of redeemable preferred stock outstanding, par value $0.0001 per share (the “ Series A Junior Preferred Stock ”), outstanding. . As of January 1, 2024 and January 2, 2023, the value of the redeemable preferred stock was $55.6 million and $51.4 million, respectively and the principal redemption amount was $53.0 million. During the years ended January 1, 2024 and January 2, 2023, the Company recorded non-cash interest expense on the redeemable preferred stock in the amount of $4.2 million and $3.9 million, respectively, related to accretion of the preferred stock to its estimated redemption value. On November 3, 2021, and as part of the Anthony's acquisition, the Company issued 2,120,000 shares of 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; provided, however, that in the event that the Credit Agreement 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, the Series A Junior Preferred Stock shall accrue dividends at 5% per annum, compounded quarterly, until June 15, 2024. 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) or 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. 01, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt (in thousands) January 1, January 2, Term loan $ 53,253 $ 54,507 Related party note payable 15,100 10,000 Revolving line of credit — 4,000 Other notes payable 701 780 Finance lease liability 1,576 933 Total Debt $ 70,630 $ 70,220 Less: Unamortized debt discount related party note (612) (765) Less: Unamortized debt issuance costs (978) (1,441) Total Debt, net $ 69,040 $ 68,014 Less: Short-term borrowing, including finance leases (52,834) (4,985) Total Long-term borrowings, including finance leases and related party note $ 16,206 $ 63,029 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 has a maturity date of September 30, 2025 (the “ Maturity Date ”), 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 6.75% through December 31, 2023 and incur interest of 7.25% through June 15, 2024 and 7.75% from June 16, 2024 though the Maturity Date. 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 had occurred and was continuing then (i) no incremental deferred interest would be due if all of the obligations under the Credit Agreement had been paid on or prior to December 31, 2022, and (ii) only 50% of the incremental deferred interest would be owed if all of the obligations under the Credit Agreement had 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 of 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 (i) 5.75% from January 1, 2023 through June 15, 2023; (ii) 6.75% per annum from June 16, 2023 through December 31, 2023; (iii) 7.25% per annum from January 1, 2024 through June 15, 2024; and (iv) 7.75% per annum from and after June 16, 2024 through the Maturity Date. In addition, the 2% incremental deferred interest implemented on March 9, 2022 was reduced to 1% beginning January 3, 2023 and was 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 $5.0 million in net cash proceeds from (i) a shelf registration and equity issuance by not later than January 2, 2023, or (ii) 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) 7.00 to 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 remained unchanged; provided, that in the event the Company had not received by January 2, 2023 at least $5.0 million in net cash proceeds as a result of shelf registration and equity issuance then the required liquidity amount as of January 2, 2023 would be reduced to $9.5 million. 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, (i) 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 (ii) 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. On February 1, 2023, the Credit Agreement was amended through the Fourteenth Amendment and subsequently on February 24, 2023 further amended through the Fifteenth Amendment resulting in the Company and its subsidiaries entering into a Secured Promissory Note (the “ Note” ) with CP7 Warming Bag L.P., an affiliate of L. Catterton Fund L.P., as lender (the “ Junior Lender ”), pursuant to which the Junior Lender continued that certain delayed draw term loan (the “ Delayed Draw Term Loan ”) of $10.0 million, under the Credit Agreement, which is junior subordinated secured indebtedness, and also provided $5.1 million of new junior subordinated secured indebtedness, to the Company (collectively the “ Junior Indebtedness ”), for a total of $15.1 million in junior subordinated secured debt on terms reasonably acceptable to the Required Lenders (as defined in the Credit Agreement), including, without limitation, that (i) such indebtedness shall not mature until at least two years after the maturity date of the credit facility of September 30, 2025 ; (ii) 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 (iii) no scheduled or voluntary payments of principal shall be made until after the repayment in full of the obligations under the Credit Agreement. The Note, 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 ”), or September 30, 2027. 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 Company had $14.5 million outstanding under the Note as of January 1, 2024; this amount is included in Related party note payable in the consolidated balance sheets. On July 7, 2023, the Credit Agreement was amended through the Sixteenth Amendment, which amended the definition of EBITDA for the purposes of expanding the scope of non-recurring items that may be included in the determination of Adjusted EBITDA, as well as modifications to the timeline for when a management consultant must be engaged. In addition, under the terms of the Sixteenth 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) 7.00 to 1.00 as of the end of the fiscal quarter ending on or about December 31, 2023, (ii) 6.75 to 1.00 as of the end of each of the fiscal quarters ending on or about March 31, 2024, June 30, 2024 and September 30, 2024, and (iii) 6.50 to 1.00 as of the end of the fiscal quarter ending on or about December 31, 2024 and the end of each fiscal quarter thereafter; and (b) maintain a quarterly minimum fixed charge coverage ratio of (i) 1.00 to 1.00 as of the end of the fiscal quarter ending on or about December 31, 2023, (ii) 1.05 to 1.00 as of the end of each of the fiscal quarters ending March 31, 2024, June 30, 2024 and September 30, 2024, and (iii) 1.10 to 1.00 as of the end of the fiscal quarter ending on or about December 31, 2024 and the end of each fiscal quarter thereafter. As of January 1, 2024, the Company was not in compliance with the minimum liquidity requirement of the Credit Agreement,which constitutes a breach of the Credit Agreement and an event of default. Accordingly, the outstanding balance of the Credit Agreement is included in short-term borrowings together with the short term borrowings, including finance leases in the accompanying consolidated balance sheets. The Company is not forecasted to have the readily available funds to repay the debt if the lenders do call the debt, which raises substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued. The Company has been actively engaged in discussions with its lenders to explore potential solutions regarding the default event and its resolution. We cannot, however, predict the results of any such negotiations. The terms of the Credit Agreement as amended require the Company to repay the principal of the term loan in quarterly installments; however due to event of default we classified all of the principal as payable within the next 12 months as follows: (in thousands) 2024 $ 53,253 2025 — 2026 — 2027 15,100 Total $ 68,353 The Delayed Draw Term Loan (as continued, amended and restated on February 24, 2023) 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; this amount is being amortized over the period of the Delayed Draw Term Loan.. The Company recorded $0.2 million and $0.5 million for the years ended January 1, 2024 and January 2, 2023 respectively, as amortization of the debt discount which is included within interest expense in the accompanying consolidated statements of operations. Beginning February 24, 2023, the Junior Indebtedness bears interest at 4%. The Company recorded interest expense of $0.5 million for the year ended January 1, 2024. The loan and revolving line of credit under the Credit Agreement 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 From January 1, 2024 through June 15, 2024 7.25 % From June 16, 2024 through maturity 7.75 % For the years ended January 1, 2024 and January 2, 2023, the Company had $1.0 million and $0.9 million, respectively, of deferred financing costs in connection with Credit Agreement. Amortization expense associated with deferred financing costs, in the amount of $0.5 million for each of the years ended January 1, 2024 and January 2, 2023, is included in interest expense in the accompanying consolidated statements of operations. Other Notes Payable Other notes payable relates to (i) a note payable to an individual, issued in connection with the Company’s acquisition of a franchised restaurant, which accrues interest over a 7-year amortization period with interest at 7.0% with a maturity date of June 1, 2024, and (ii) an Economic Injury Disaster Loan from the Small Business Administration ( “SBA” ), payable over a 30-year amortization period with interest at 3.7% with a maturity date of July 25, 2052, which is primarily for one corporate-owned restaurant. Interest expense consists of the following for the periods shown: (in thousands) Year Ended January 1, 2024 Year Ended Interest on credit agreement $ 3,751 $ 3,814 Interest on related party note 502 — Amortization of debt issuance costs 520 514 Amortization of related party note discount 153 510 Non-cash interest on redeemable preferred stock 4,211 3,892 Other interest expense (income) (309) (71) Total $ 8,828 $ 8,659 |
Leases
Leases | 12 Months Ended |
Jan. 01, 2024 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into various lease agreements. For the years ended January 1, 2024 and January 2, 2023, rent expense was approximately $16.5 million and $16.2 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 A SC 842. Prior period amounts were not revised and continue to be reported in accordance with ASC Topic 840 “ Lease s”, 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 consolidated balance sheets: (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 1, 2024 and January 2, 2023 is as follows: (in thousands) Classification January 1, 2024 January 2, 2023 Operating Leases Operating right-of-use asset, net $ 46,052 $ 45,741 Finance Leases Property and equipment, net 1,116 852 Total right-of-use assets $ 47,168 $ 46,593 Operating leases: Short-term operating lease liability $ 10,111 $ 9,924 Long-term operating lease liability 44,631 40,748 Finance leases: Short-term borrowings, including finance 226 150 Long-term borrowings, including finance 1,350 783 Total lease liabilities $ 56,318 $ 51,605 The components of lease expense for the periods shown is as follows: (in thousands) Classification Year Ended January 1, 2024 Year Ended Operating lease cost Occupancy and related expenses $ 13,051 $ 12,969 Pre-opening costs 93 — Store closure costs 75 — Lease asset impairment Asset impairment 2,617 3,846 Finance lease costs: Amortization of right-of use assets Depreciation and amortization expense 282 258 Interest on lease liabilities Interest expense 85 63 Less: Sublease income Occupancy and related expenses (204) (194) Total lease cost $ 15,999 $ 16,942 The maturity of the Company's operating and finance lease liabilities as of January 1, 2024 is as follows: (in thousands) Operating Leases Finance Leases 2024 13,828 $ 362 2025 13,270 348 2026 11,523 319 2027 9,881 287 2028 8,245 263 2029 and thereafter 9,884 554 Total undiscounted lease payments 66,631 2,133 Less: present value adjustment (11,889) (557) Total net lease liabilities $ 54,742 $ 1,576 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 January 1, 2024 Weighted-average remaining lease term (in years): Operating Leases 5.5 Finance Leases 6.6 Weighted-average discount rate: Operating Leases 7.6 % Finance Leases 9.6 % |
Leases | Leases The Company has entered into various lease agreements. For the years ended January 1, 2024 and January 2, 2023, rent expense was approximately $16.5 million and $16.2 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 A SC 842. Prior period amounts were not revised and continue to be reported in accordance with ASC Topic 840 “ Lease s”, 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 consolidated balance sheets: (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 1, 2024 and January 2, 2023 is as follows: (in thousands) Classification January 1, 2024 January 2, 2023 Operating Leases Operating right-of-use asset, net $ 46,052 $ 45,741 Finance Leases Property and equipment, net 1,116 852 Total right-of-use assets $ 47,168 $ 46,593 Operating leases: Short-term operating lease liability $ 10,111 $ 9,924 Long-term operating lease liability 44,631 40,748 Finance leases: Short-term borrowings, including finance 226 150 Long-term borrowings, including finance 1,350 783 Total lease liabilities $ 56,318 $ 51,605 The components of lease expense for the periods shown is as follows: (in thousands) Classification Year Ended January 1, 2024 Year Ended Operating lease cost Occupancy and related expenses $ 13,051 $ 12,969 Pre-opening costs 93 — Store closure costs 75 — Lease asset impairment Asset impairment 2,617 3,846 Finance lease costs: Amortization of right-of use assets Depreciation and amortization expense 282 258 Interest on lease liabilities Interest expense 85 63 Less: Sublease income Occupancy and related expenses (204) (194) Total lease cost $ 15,999 $ 16,942 The maturity of the Company's operating and finance lease liabilities as of January 1, 2024 is as follows: (in thousands) Operating Leases Finance Leases 2024 13,828 $ 362 2025 13,270 348 2026 11,523 319 2027 9,881 287 2028 8,245 263 2029 and thereafter 9,884 554 Total undiscounted lease payments 66,631 2,133 Less: present value adjustment (11,889) (557) Total net lease liabilities $ 54,742 $ 1,576 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 January 1, 2024 Weighted-average remaining lease term (in years): Operating Leases 5.5 Finance Leases 6.6 Weighted-average discount rate: Operating Leases 7.6 % Finance Leases 9.6 % |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 01, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The (benefit) from provision for income taxes is set forth below: (in thousands) January 1, 2024 January 2, 2023 Current: U.S. Federal $ — $ — State 13 35 Total current income tax expense $ 13 $ 35 Deferred: U.S. Federal (6,117) (10,002) State (499) (1,469) Total deferred income tax benefit (6,616) (11,471) Valuation allowance 6,538 11,341 Total deferred income tax benefit, net of valuation allowance (78) (130) Income tax benefit $ (65) $ (95) 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 1, 2024 January 2, 2023 Income tax provision at the U.S. federal statutory rate $ (6,462) $ (21,741) Permanent differences 1,434 870 Share-based compensation (33) (463) State income taxes, net of federal benefit (675) (1,640) Change in warrant liability (3) (527) Goodwill impairment — 11,471 True-up 221 1,983 Change in valuation allowance 6,538 11,342 Change in rate 13 (249) Tax credits (1,098) (1,141) Total income tax benefit $ (65) $ (95) The components of the Company's deferred tax liabilities at January 1, 2024 and January 2, 2023 are set forth below: (in thousands) January 1, 2024 January 2, 2023 Deferred tax assets (liabilities): Allowance for doubtful accounts $ 30 $ 40 Goodwill 3,503 4,625 Fixed Assets 2,307 2,164 Deferred franchise fees 187 277 Deferred rent — — Stock compensation 1,210 1,730 Net operating losses, Federal 17,116 13,649 Net operating losses, State 3,264 2,691 Deferred payroll taxes — — Interest expense 7,309 5,351 Lease liability 14,128 13,104 Tax credits 2,951 1,854 Other 1,418 1,599 Gross deferred tax assets 53,423 47,084 Valuation allowance (29,166) (22,629) Net deferred tax assets 24,257 24,455 Intangible assets (13,571) (13,878) Lease ROU asset (11,832) (11,800) Fixed assets — — Deferred tax liabilities (25,403) (25,678) Total net deferred tax liabilities $ (1,146) $ (1,223) As of January 1, 2024, the Company’s federal net operating loss carryforwards for income tax purpos es was $81.5 million. On a tax-effected basis, the Company also had net operating losses of $3.3 million related to various state jurisdictions. $71.9 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 2038 . 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. Section 382 of the Internal Revenue Code limits the Company’s ability to utilize certain tax deductions to offset taxable income in future years, due to the existence of a Net Unrealizable Built-In Loss at the time of the change in control. Such a limitation will be effective for a five-year period subsequent to the change in control. In the event the Company has Recognized Built-In Losses (“RBIL”) during the five-year period, those losses will be limited; losses exceeding the annual limitation are carried forward as RBIL carryovers. As of January 1, 2024 the Company has approximately $3.7 million of RBIL carryovers, which carry forward indefinitely. 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 $29.2 million has been recorded against the deferred tax asset. The following table summarizes the Company's unrecognized tax benefits at January 1, 2024 and January 2, 2023: (in thousands) January 1, 2024 January 2, 2023 Beginning balance $ 229 $ 660 Additions based on tax positions related to the current year — — Additions for tax positions of prior years — — Reductions for positions of prior years (229) (431) Ending balance $ — $ 229 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 01, 2024 | |
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 1, 2024 and January 2, 2023, there were 26,832,691 shares and 22,257,772 shares of common stock outstanding, respectively. In addition to the CEO Awards, as defined below, as an inducement to employment, effective as of July 10, 2023, the Company issued the CEO 63,500 shares of the Company’s common stock, which such shares are subject to Rule 144 of the Securities Act of 1933, as amended (the “ Securities Act ”). 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 1, 2024 and January 2, 2023, there were 2,120,000 shares of preferred stock outstanding. See Note 8, “ Redeemable Preferred Stock ,” for further information. Warrant s As of January 1, 2024 and January 2, 2023, 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 (“Private Placement Warrants”), 445,000 in Private Warrants and 150,000 in Working Capital Warrants. The public warrants expire in December 2025. There were no warrants exercised during the years ended January 1, 2024 and January 2, 2023. 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, Private Warrants and Working Capital Warrants (collectively, the“Other Warrants”) are identical to the public warrants, except that the Other Warrants and the common stock issuable upon the exercise of the Other Warrants became transferable, assignable or salable after the completion of the BurgerFi acquisition, subject to certain limited exceptions. Additionally, the Other 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 Other Warrants are held by someone other than the initial purchasers or their permitted transferees, the Other 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 Other 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 one common share and one warrant per Unit) exercisable at $10.00 per Unit. The unit purchase option (“ UPO ”) 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, and there were no UPO exchanges between January 2, 2023 and March 17, 2023. 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, RSU 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 were issuable under the Plan was 2,000,000 Shares. Provisions under the Plan allow for the aggregate number of Shares reserved for Awards under the Plan (other than Incentive Stock Options) to automatically increase on January 1 of each year, for a period of not more than 10 years, commencing on January 1 of the year following the year after the date the Plan became effective in an amount equal to 5% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, provided that the Compensation Committee of the board of directors (the “ Compensation Committee ”) may determine prior to the first day of the applicable fiscal year to lower the amount of such annual increase. The Company grants RSUs with service conditions, PSUs with performance and market conditions and unrestricted stock awards. RSUs granted with service conditions generally vest over 4 years. Performance conditions are based on key performance indicators, and market conditions include an index to the market value of the stock price of the Company. The fair value of the RSUs and PSUs 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 RSUs and PSUs issued under the Plan during the year ended January 1, 2024: Service Condition Performance 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 January 2, 2023 162,000 $ 14.65 1,051,100 $ 12.62 232,500 $ 5.34 Granted 330,960 1.30 496,000 1.19 — — Vested (358,595) 5.25 (283,487) 13.66 (52,500) $ 6.40 Forfeited (84,365) 1.59 (191,063) 5.85 (140,000) 5.38 Non-vested at January 1, 2024 50,000 $ 15.70 1,072,550 $ 8.27 40,000 3.37 Service Condition RSUs The Company grants RSUs with service conditions to certain officers and key employees. The vesting of these awards is contingent upon meeting the requisite service period. The fair value of these RSU awards granted is determined using the fair market value of the Company’s common stock on the date of grant. During the years ended January 1, 2024 and January 2, 2023, the Company recognized share-based compensation expense of approximately $1.1 million and $2.1 million, respectively, in relation to these awards. Performance Condition PSUs The Company grants performance-condition PSUs to certain officers and employees of the Company. The vesting of these PSU awards is contingent upon meeting one or more defined operational or financial goals. The fair values of the PSU awards granted was determined using the fair market value of the Company’s common stock on the date of grant. Share-based compensation expense recorded for these PSU awards is reevaluated at each reporting period based on the probability of the achievement of the goal. Certain goals were achieved as of January 1, 2024 and January 2, 2023; accordingly, the Company recognized share-based compensation expense of approximately $2.9 million and $3.7 million, respectively, in relation to these awards. Market Condition PSUs The Company grants market-condition PSUs to certain members of senior management of the Company. The vesting of these awards is contingent upon meeting one or more defined market conditions tied to the share price of BurgerFi common stock outstanding. The fair value of market condition awards granted was 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. The input variables are noted in the table below: Year Ended January 2, 2023 Risk-free interest rate 0.4% - 4.1% Expected life in years 2 Expected volatility 57.3% - 65.9% Expected dividend yield * —% * The Monte Carlo method assumes a reinvestment of dividends. Share-based compensation expense is recorded ratably for market condition PSUs 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. The Company recognized a reversal of share-based compensation expense due to forfeitures of approximately $0.1 million for the year ended January 1, 2024; for the year ended January 2, 2023, the Company recognized $0.6 million in share-based compensation expense in relation to these awards. Unrestricted Stock Awards On January 3, 2023, the Company issued 1,141,750 unrestricted shares to the Executive Chairman and two senior executives of the Company, as well as 38,000 unrestricted shares to the Consultant Principal (see Note 6,” Related Parties ”). The Company recognized approximately $1.5 million of share based-compensation for the year ended January 1, 2024. Restricted Stock Unit Awards - Inducement Awards On July 10, 2023, the Company issued awards of RSUs and PSUs to the Chief Executive Officer ( “CEO Awards ”) and the Chief Financial Officer ( “CFO Awards ”) as part of an inducement to enter into employment agreements with the Company (“ Inducement Awards ”). The Inducement Awards are not part of the Plan. Terms of the Inducement Awards are as follows: • The CEO Awards are comprised of 500,000 time-based RSUs which, subject to continuous employment, vest in equal tranches of 100,000 units per year, and 500,000 PSUs, which, subject to continuous employment and the achievement of certain performance criteria, vest in equal tranches of 100,000 units per year. • The CFO Awards are comprised of 200,000 time-based RSUs which, subject to continuous employment, vest in equal tranches of 40,000 units per year, and 200,000 PSUs, which, subject to continuous employment and the achievement of certain performance criteria, vest in equal tranches of 40,000 units per year. Performance Condition Service Condition Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at January 2, 2023 — $ — — $ — Granted 700,000 $ 1.57 700,000 $ 1.57 Vested — — — — Forfeited — — — — Non-vested at January 1, 2024 700,000 $ 1.57 700,000 $ 1.57 Vesting for the Inducement Awards is over a 5-year period. Share based compensation expense related to the Inducement Awards recognized during the year ended January 1, 2024 was $0.2 million; there was no share-based compensation expense recognized during the year ended January 2, 2023. As of January 1, 2024, there was approximately $1.9 million of total unrecognized compensation cost related to unvested Inducement Awards to be recognized over a weighted average period of 3.2 years. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 01, 2024 | |
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 1, 2024 and January 2, 2023. Items Measured at Fair Value at January 1, 2024 - Debt Instruments (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 — 182 — Total $ — $ 182 $ — 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 $ — In estimating its fair value disclosures for financial instruments, the Company uses 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. Short-term borrowings: The fair value of the Company’s short-term borrowings under the Credit Agreement approximates between $20 million to $40 million and its carrying value was $53.3 million as of January 1, 2024. The fair value is estimated using Level 3 inputs based on quoted prices for those or similar instruments. The Company has been actively engaged in discussions with its lenders to explore potential solutions regarding the default event and its resolution. The fair value of the short-term borrowings are highly sensitive to the results of any such negotiations and may differ significantly from the fair value amount disclosed. Refer to Note 9, “ Debt ,” for further discussion. Warrant liability: 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 values of the Other Warrants are determined using the publicly-traded price of the Company’s common stock on the valuation dates of $0.86 on December 29, 2023, the last trading day before January 1, 2024 and $1.26 on December 30, 2022, the last trading day before January 2, 2023. 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 $0.05 on January 1, 2024 and January 2, 2023, respectively. The input variables for the Black-Scholes are noted in the table below: January 1, 2024 January 2, 2023 Risk-free interest rate 4.25 % 4.14 % Expected life in years 2.0 3.0 Expected volatility 98.0 % 68.0 % Expected dividend yield 0 % 0 % Assets and liabilities that are measured at fair value on a non-recurring basis include the Company’s long-lived assets and definite-lived intangible assets. In determining fair value, the Company uses an income-based approach. As a number of assumptions and estimates were involved that are largely unobservable, they are classified as Level 3 inputs within the fair value hierarchy. Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, royalties, gross margins, and operating expense in relation to the current economic environment and the Company’s future expectations. |
Segment Information
Segment Information | 12 Months Ended |
Jan. 01, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer is the CODM. The Company has two operating and reportable segments: BurgerFi and Anthony’s. BurgerFi . BurgerFi is a fast-casual “better burger” concept with franchised and corporate-owned restaurants as 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 concept 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. The CODM measures segment income based on Adjusted EBITDA and believes that the adjusted measure provides a baseline for analyzing business trends. The Company defines Adjusted EBITDA as net loss before goodwill impairment, asset impairment, employee retention credits, share-based compensation expense, depreciation and amortization expense, interest expense (which includes accretion on the value of preferred stock and interest accretion (on the related party note), restructuring costs, merger, acquisition and integration costs, legal settlements, store closure costs, gain on change in value of warrant liability, pre-opening costs, (gain) loss on sale of assets and income tax expense (benefit). 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 our segments are predominantly in the U.S. There were no material transactions among the Company’s segments. The following table presents segment revenue and a reconciliation of adjusted EBITDA to net loss by segment: Consolidated Anthony’s BurgerFi (in thousands) January 1, January 2, January 1, January 2, January 1, January 2, Revenue by Segment $ 170,100 $ 178,720 $ 125,637 $ 128,819 $ 44,463 $ 49,901 Net Loss $ (30,708) $ (103,432) $ (3,132) (53,057) $ (27,576) (50,375) Goodwill impairment — 66,569 — 49,064 — 17,505 Asset impairment charges 4,524 6,946 1,240 256 3,284 6,690 Employee retention credits — (2,626) — — — (2,626) Share-based compensation expense 5,612 10,239 188 — 5,424 10,239 Depreciation and amortization expense 13,154 17,138 4,544 7,567 8,610 9,571 Interest expense 8,828 8,659 4,766 4,816 4,062 3,843 Restructuring costs 2,657 1,459 1,068 763 1,589 696 Merger, acquisition and integration costs 818 2,787 127 154 691 2,633 Legal settlements 564 1,623 99 35 465 1,588 Store closure costs 587 1,949 303 16 284 1,933 (Gain) on change in value of warrant liability (13) (2,511) — — (13) (2,511) Pre-opening costs 203 474 — — 203 474 (Gain) loss on sale of assets (93) (15) (94) 19 1 (34) Income tax (benefit) expense (65) (95) (61) (335) (4) 240 Adjusted EBITDA $ 6,068 $ 9,164 $ 9,048 $ 9,298 $ (2,980) $ (134) The following table summarizes information for the Company’s capital expenditures, long lived assets (including property and equipment, net and operating lease right-of-use assets), and total assets by segment as of and for the years ended January 1, 2024 and January 2, 2023: (in thousands) January 1, 2024 January 2, 2023 Capital Expenditures: BurgerFi $ 1,573 $ 1,428 Anthony’s 930 $ 1,089 Total $ 2,503 $ 2,517 Long-lived assets: BurgerFi $ 19,184 $ 20,093 Anthony’s 42,989 $ 45,019 Total $ 62,173 $ 65,112 Total Assets: BurgerFi $ 120,792 $ 136,810 Anthony’s 137,684 $ 139,970 Total $ 258,476 $ 276,780 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jan. 01, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events I n addition to the transactions and events disclosed throughout the financial statements, below are additional events that occurred subsequent to January 1, 2024. On January 23, 2024, the Company received a notice (the “Notice”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that the Company is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rules 5450(a)(1) (the “Bid Price Rule”) for continued listing. The Bid Price Rule requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) (the “Compliance Period Rule”) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notice has no immediate effect on the listing of the Company’s common stock or warrants on the Nasdaq Global Market. In accordance with the Compliance Period Rule, the Company has 180 calendar days to regain compliance. If at any time before the end of this 180-day period, or through July 22, 2024, the closing bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, subject to the Staff’s discretion to extend this period pursuant to Nasdaq Listing Rule 5810(c)(3)(H), the Staff will provide written notification that the Company has achieved compliance with the Bid Price Rule. If the Company does not regain compliance during this 180-day period, it may be eligible for additional time to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(ii) by transferring to the Nasdaq Capital Market. The Company intends to continue to monitor the closing bid price of its common stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods. If the Company does not regain compliance within the allotted compliance periods, including any extensions that may be granted by the Staff, the Staff will provide notice that the Company’s common stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will be successful in maintaining the listing of its common stock on the Nasdaq Global Market, or, if transferred, on the Nasdaq Capital Market. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 01, 2024 | |
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 substantial doubt about the Company’s ability to continue as a going concern existed as of January 1, 2024 as a result of non-compliance of the Company’s liquidity covenant within the Company’s Credit Agreement. The Company’s credit agreement (“Credit Agreement”) with a syndicate of banks has approximately $53.3 million in financing outstanding as of January 1, 2024, and expires on September 30, 2025. The Credit Agreement contains various covenants, including requirements for the Company to meet certain trailing twelve-month quarterly financial ratios and a minimum liquidity threshold. As of January 1, 2024, the Company was not in compliance with the minimum liquidity requirement of the Credit Agreement, which constitutes a breach of the Credit Agreement and an event of default. Accordingly, the outstanding balance of the Credit Agreement is included in short-term borrowings together with the short term portion outstanding balance under its finance leases on the accompanying consolidated balance sheets. This event of default entitles the lenders to call the debt sooner than its maturity date of September 30, 2025. The Company does not have and is not forecasted to have the readily available funds to repay the debt if called by the lenders. The Company has been actively engaged in discussions with its lenders to explore potential solutions regarding the default event and its resolution. We cannot, however, predict the results of any such negotiations. The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. See Note 9, “ Debt |
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 years 2023 and 2022 ended on January 1, 2024 and January 2, 2023, respectively. |
Reclassifications | Reclassifications Certain amounts for general and administrative expense, and other income, have been reclassified within the consolidated statements of operations for the year ended January 2, 2023 and are comparable to the year ended January 1, 2024. |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of 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 $1.9 million and $2.4 million as of January 1, 2024 and January 2, 2023, 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 and 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 $0.1 million at January 1, 2024 and $0.2 million at January 2, 2023. |
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 and Equipment, net Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is provided by the straight-line method over an estimated useful life as shown below: Years Leaseholder Improvements Shorter of lease term or life of asset Kitchen equipment and other equipment 5 - 7 Computers and office equipment 3 - 5 Furniture and fixtures 5 - 7 Vehicles 5 - 7 Maintenance and repairs which are not considered to extend the useful lives of the assets are charged to operations as incurred. Expenditures for additions and improvements are capitalized. Expenditures for renewals and betterments, which materially extend the useful lives of assets or increase their productivity, are capitalized. The Company capitalizes construction costs during construction of the restaurant and will begin to depreciate them once the restaurant is placed in service. Wage costs directly related to and incurred during a restaurant’s construction period are capitalized. Interest costs incurred during a restaurant’s construction period are capitalized. Upon sale or retirement, the cost of assets and related accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are included in other income (loss) on the Company’s consolidated statements of operations. |
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 as shown below: Years Franchise agreements 7 Trade names 30 License agreements 2 VegiFi product 10 Right of use assets 5 - 10 Refer to Note 10, “ Leases ”, for additional disclosures 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 Financial Accounting Standards Board “ FASB ” Accounting Standards Codification (“ ASC ”) No. 350, “ Intangibles—Goodwill and Other ” (“ A SC 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 annual goodwill impairment test performed for the year ended January 1, 2024, it determined that goodwill was not impaired. For the year ended January 2, 2023, the Company recorded goodwill impairment charges of approximately $66.6 million. Refer to Note 5, “ Impairment ,” for additional information. |
Deferred Financing Costs | Deferred Financing Costs |
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 or market conditions, in which case the Company recognizes compensation expense over the requisite service period to the extent the conditions are considered probable. Forfeitures are recognized as they occur. The Company determines 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 restricted stock unit awards with performance conditions ( “PSU 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 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) 2,562,550 shares of restricted stock unit grants in the calculation of net loss per common share, and (3) the impact of any dividends associated with its redeemable preferred stock, and such items have not been included in the calculation of net loss per common share as the effect of such items would have been anti-dilutive. |
Reconciliation of Net Loss 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 1, 2024 Year Ended Numerator: Net loss available to common stockholders $ (30,708) $ (103,432) Denominator: Weighted-average shares outstanding, basic and diluted 25,521,098 22,173,694 Basic and diluted net loss per common share $ (1.20) $ (4.66) |
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 years ended January 1, 2024 and January 2, 2023. As of January 1, 2024, the Company had two main in-line distributors of food, packaging and beverage products that provided approximately 89% of the Company's restaurants purchasing of those products in the United States. 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 our requirements. However, if a disruption of service from any of our 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 19 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 $0.8 million and $1.0 million at January 1, 2024 and January 2, 2023, respectively, and is presented in accrued expenses and other current liabilities in the accompanying consolidated balance sheets. |
Advertising Expenses | Advertising Expenses |
Brand Development Royalties and Expenses | Brand Development Royalties and Expenses |
Advertising Co-Op Royalties and Expenses | Advertising Co-Op Royalties and Expenses |
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 Accounting Standards Codification Topic 842 “ Leases ” ( “ASC 842” ), 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 5-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 1, 2024 and January 2, 2023. 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 unrecognized tax benefits at January 2, 2023. The Company had no unrecognized tax benefits at January 1, 2024 The Company accrues interest related to uncertain tax positions in “Interest expense” and penalties in “General and administrative expenses.” At January 1, 2024 and January 2, 2023, there were no amounts accrued for interest or for penalties. |
Recently issued and adopted/not yet adopted Accounting Pronouncements | Recently issued and adopted Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08 (“ ASU 2021-08 ”), B usiness Combinations, (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to provide guidance that requires entities to recognize contract assets and contract liabilities in a business combination. This standard was effective for the Company’s fiscal year beginning after January 3, 2023, including interim periods within the fiscal year. The adoption of ASU 2021-08 did not have a material impact on its consolidated financial statements for the year ended January 1, 2024. Recently issued Accounting Pronouncements not yet adopted In November 2023, the FASB issued ASU No. 2023-07 (“ ASU 2023-07 ”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09 (“ ASU 2023-09 ”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
Accounting Policies [Abstract] | |
Summary of Store Activity | Store activity for the years ended and January 1, 2024 and January 2, 2023 is as follows: 2023 2022 Corporate-owned Franchised Total Corporate-owned Franchised Total Total BurgerFi and Anthony's 87 81 168 85 89 174 BurgerFi stores, beginning of the period 25 89 114 25 93 118 BurgerFi stores opened — 8 8 3 8 11 BurgerFi stores transferred/sold 4 (4) — (3) 3 — BurgerFi stores closed (1) (13) (14) — (15) (15) BurgerFi total stores, end of the period 28 80 108 25 89 114 Anthony's stores, beginning of period / acquired 60 — 60 61 — 61 Anthony's stores opened — 1 1 — — — Anthony's stores closed (1) — (1) (1) — (1) Anthony's total stores, end of the period 59 1 60 60 — 60 |
Summary of Useful Lives of Property and Equipment, Net | Depreciation is provided by the straight-line method over an estimated useful life as shown below: Years Leaseholder Improvements Shorter of lease term or life of asset Kitchen equipment and other equipment 5 - 7 Computers and office equipment 3 - 5 Furniture and fixtures 5 - 7 Vehicles 5 - 7 Property and equipment consisted of the following: (in thousands) January 1, 2024 January 2, 2023 Leasehold improvements $ 17,579 $ 17,029 Kitchen equipment and other equipment 8,708 8,196 Computers and office equipment 1,536 1,468 Furniture and fixtures 2,828 2,677 Vehicles 8 37 30,659 29,407 Less: Accumulated depreciation and amortization (14,538) (10,036) Property & equipment – net $ 16,121 $ 19,371 |
Summary of Finite-Lived Intangible Assets Useful Life | Definite-lived intangible assets are amortized on a straight-line basis using the following estimated useful lives of the related classes of intangibles as shown below: Years Franchise agreements 7 Trade names 30 License agreements 2 VegiFi product 10 Right of use assets 5 - 10 |
Schedule of Goodwill | The following table represents changes to the Company's goodwill balances during the years ended January 1, 2024 and January 2, 2023 : Reporting Unit (in thousands) BurgerFi Anthony's Total Goodwill Balance at December 31, 2021 $ 17,505 $ 80,495 $ 98,000 Adjustment to goodwill acquired — 190 190 Impairment loss (17,505) (49,064) (66,569) Balance at January 2, 2023 and January 1, 2024 $ — $ 31,621 $ 31,621 The following presents information about the Company’s goodwill on the dates indicated: (in thousands) Anthony’s Segment BurgerFi Segment Total Balance as of December 31, 2021 Goodwill $ 80,684 $ 123,981 $ 204,665 Accumulated impairment losses (49,064) (123,981) (173,045) Goodwill, net as of January 2, 2023 $ 31,621 $ — $ 31,621 Goodwill $ 80,684 $ 123,981 $ 204,665 Accumulated impairment losses (49,064) $ (123,981) (173,045) Goodwill, net as of January 1, 2024 $ 31,621 $ — $ 31,621 |
Summary of Restructuring and Related Costs | Restructuring costs for the periods shown consist of the following: (in thousands) Year Ended January 1, 2024 Year Ended Expenses related to financing $ 1,168 $ 660 Severance and onboarding costs associated with change in CEO and CFO 1,489 799 Total $ 2,657 $ 1,459 |
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 1, 2024 Year Ended Numerator: Net loss available to common stockholders $ (30,708) $ (103,432) Denominator: Weighted-average shares outstanding, basic and diluted 25,521,098 22,173,694 Basic and diluted net loss per common share $ (1.20) $ (4.66) |
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 1, 2024 and January 2, 2023 are as follows: (in thousands) Year Ended January 1, 2024 Year Ended Franchising receivables $ 137 $ 168 Gift card liability $ 2,205 $ 1,847 Unearned revenue, current $ 19 $ 84 Unearned revenue, long-term $ 726 $ 1,008 Revenue recognized during the years ended are as follows: (in thousands) Year ended January 1, 2024 Year Ended January 2, 2023 Franchise Fees $ 613 $ 1,806 An analysis of unearned revenue is as follows: (in thousands) Year ended January 1, 2024 Year Ended January 2, 2023 Balance, beginning of period $ 1,092 $ 2,577 Initial/Transfer franchise fees received 265 364 Revenue recognized for stores open and transfers during period (137) (325) Revenue recognized related to franchise agreement terminations (418) (1,481) Other unearned revenue (recognized) received (57) (43) Balance, end of period $ 745 $ 1,092 |
Property & Equipment (Tables)
Property & Equipment (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Depreciation is provided by the straight-line method over an estimated useful life as shown below: Years Leaseholder Improvements Shorter of lease term or life of asset Kitchen equipment and other equipment 5 - 7 Computers and office equipment 3 - 5 Furniture and fixtures 5 - 7 Vehicles 5 - 7 Property and equipment consisted of the following: (in thousands) January 1, 2024 January 2, 2023 Leasehold improvements $ 17,579 $ 17,029 Kitchen equipment and other equipment 8,708 8,196 Computers and office equipment 1,536 1,468 Furniture and fixtures 2,828 2,677 Vehicles 8 37 30,659 29,407 Less: Accumulated depreciation and amortization (14,538) (10,036) Property & equipment – net $ 16,121 $ 19,371 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
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 and impairment charges: January 1, 2024 (in thousands) Weighted Average Remaining Useful Life (years) Amount Accumulated Amortization Accumulated Impairment Charges Net Carrying Value Franchise agreements 4.0 $ 24,839 $ (10,793) $ — 14,046 BurgerFi trade names / trademarks 27.0 83,033 (8,419) — 74,614 Anthony's trade names / trademarks 27.8 60,690 (4,383) — 56,307 Other intangibles 7.0 9,018 (1,241) (7,706) 71 Subtotal 177,580 (24,836) (7,706) 145,038 Liquor licenses $5,930 — (113) 5,818 Total intangible assets, net $ 183,510 $ (24,836) $ (7,818) $ 150,856 January 2, 2023 (in thousands) Weighted Average Remaining Useful Life (years) Amount Accumulated Amortization Accumulated Impairment Charges Net Carrying Value Franchise agreements 5.0 $ 24,839 $ (7,244) $ — $ 17,595 BurgerFi trade names / trademarks 28.0 83,033 (5,650) — 77,383 Anthony's trade names / trademarks 28.8 60,690 (2,359) — 58,331 Other intangibles 8.0 9,018 (1,091) (7,706) 221 Subtotal 177,580 (16,344) (7,706) 153,530 Liquor licenses 6,678 — 6,678 Total intangible assets, net $ 184,258 $ (16,344) $ (7,706) $ 160,208 |
Schedule of Goodwill | The following table represents changes to the Company's goodwill balances during the years ended January 1, 2024 and January 2, 2023 : Reporting Unit (in thousands) BurgerFi Anthony's Total Goodwill Balance at December 31, 2021 $ 17,505 $ 80,495 $ 98,000 Adjustment to goodwill acquired — 190 190 Impairment loss (17,505) (49,064) (66,569) Balance at January 2, 2023 and January 1, 2024 $ — $ 31,621 $ 31,621 The following presents information about the Company’s goodwill on the dates indicated: (in thousands) Anthony’s Segment BurgerFi Segment Total Balance as of December 31, 2021 Goodwill $ 80,684 $ 123,981 $ 204,665 Accumulated impairment losses (49,064) (123,981) (173,045) Goodwill, net as of January 2, 2023 $ 31,621 $ — $ 31,621 Goodwill $ 80,684 $ 123,981 $ 204,665 Accumulated impairment losses (49,064) $ (123,981) (173,045) Goodwill, net as of January 1, 2024 $ 31,621 $ — $ 31,621 |
Summary of Components of Related Amortization Expense | The estimated aggregate amortization expense for intangible assets over the next five fiscal years and thereafter is as follows: (in thousands) 2024 $ 8,353 2025 8,353 2026 8,353 2027 8,205 2028 4,804 Thereafter 106,970 Total $ 145,038 |
Impairment (Tables)
Impairment (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
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 1, 2024 Year Ended Goodwill $ — $ 66,569 Indefinite-lived intangible assets 113 — Long-lived assets 1,794 3,100 Right-of-use assets 2,617 3,846 Total non-cash impairment charge $ 4,524 $ 73,515 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | (in thousands) January 1, January 2, Term loan $ 53,253 $ 54,507 Related party note payable 15,100 10,000 Revolving line of credit — 4,000 Other notes payable 701 780 Finance lease liability 1,576 933 Total Debt $ 70,630 $ 70,220 Less: Unamortized debt discount related party note (612) (765) Less: Unamortized debt issuance costs (978) (1,441) Total Debt, net $ 69,040 $ 68,014 Less: Short-term borrowing, including finance leases (52,834) (4,985) Total Long-term borrowings, including finance leases and related party note $ 16,206 $ 63,029 The loan and revolving line of credit under the Credit Agreement 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 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 Credit Agreement as amended require the Company to repay the principal of the term loan in quarterly installments; however due to event of default we classified all of the principal as payable within the next 12 months as follows: (in thousands) 2024 $ 53,253 2025 — 2026 — 2027 15,100 Total $ 68,353 |
Schedule of Interest Income and Interest Expense Disclosure | Interest expense consists of the following for the periods shown: (in thousands) Year Ended January 1, 2024 Year Ended Interest on credit agreement $ 3,751 $ 3,814 Interest on related party note 502 — Amortization of debt issuance costs 520 514 Amortization of related party note discount 153 510 Non-cash interest on redeemable preferred stock 4,211 3,892 Other interest expense (income) (309) (71) Total $ 8,828 $ 8,659 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
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 consolidated balance sheets: (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 January 1, 2024 Weighted-average remaining lease term (in years): Operating Leases 5.5 Finance Leases 6.6 Weighted-average discount rate: Operating Leases 7.6 % Finance Leases 9.6 % |
Lease, Cost | A summary of finance and operating lease right-of-use assets and liabilities as of January 1, 2024 and January 2, 2023 is as follows: (in thousands) Classification January 1, 2024 January 2, 2023 Operating Leases Operating right-of-use asset, net $ 46,052 $ 45,741 Finance Leases Property and equipment, net 1,116 852 Total right-of-use assets $ 47,168 $ 46,593 Operating leases: Short-term operating lease liability $ 10,111 $ 9,924 Long-term operating lease liability 44,631 40,748 Finance leases: Short-term borrowings, including finance 226 150 Long-term borrowings, including finance 1,350 783 Total lease liabilities $ 56,318 $ 51,605 The components of lease expense for the periods shown is as follows: (in thousands) Classification Year Ended January 1, 2024 Year Ended Operating lease cost Occupancy and related expenses $ 13,051 $ 12,969 Pre-opening costs 93 — Store closure costs 75 — Lease asset impairment Asset impairment 2,617 3,846 Finance lease costs: Amortization of right-of use assets Depreciation and amortization expense 282 258 Interest on lease liabilities Interest expense 85 63 Less: Sublease income Occupancy and related expenses (204) (194) Total lease cost $ 15,999 $ 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 1, 2024 is as follows: (in thousands) Operating Leases Finance Leases 2024 13,828 $ 362 2025 13,270 348 2026 11,523 319 2027 9,881 287 2028 8,245 263 2029 and thereafter 9,884 554 Total undiscounted lease payments 66,631 2,133 Less: present value adjustment (11,889) (557) Total net lease liabilities $ 54,742 $ 1,576 |
Finance Lease, Liability, Fiscal Year Maturity | The maturity of the Company's operating and finance lease liabilities as of January 1, 2024 is as follows: (in thousands) Operating Leases Finance Leases 2024 13,828 $ 362 2025 13,270 348 2026 11,523 319 2027 9,881 287 2028 8,245 263 2029 and thereafter 9,884 554 Total undiscounted lease payments 66,631 2,133 Less: present value adjustment (11,889) (557) Total net lease liabilities $ 54,742 $ 1,576 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for (Benefit) From Income Taxes | The (benefit) from provision for income taxes is set forth below: (in thousands) January 1, 2024 January 2, 2023 Current: U.S. Federal $ — $ — State 13 35 Total current income tax expense $ 13 $ 35 Deferred: U.S. Federal (6,117) (10,002) State (499) (1,469) Total deferred income tax benefit (6,616) (11,471) Valuation allowance 6,538 11,341 Total deferred income tax benefit, net of valuation allowance (78) (130) Income tax benefit $ (65) $ (95) |
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 1, 2024 January 2, 2023 Income tax provision at the U.S. federal statutory rate $ (6,462) $ (21,741) Permanent differences 1,434 870 Share-based compensation (33) (463) State income taxes, net of federal benefit (675) (1,640) Change in warrant liability (3) (527) Goodwill impairment — 11,471 True-up 221 1,983 Change in valuation allowance 6,538 11,342 Change in rate 13 (249) Tax credits (1,098) (1,141) Total income tax benefit $ (65) $ (95) |
Schedule of Deferred Tax Assets (Liabilities) | The components of the Company's deferred tax liabilities at January 1, 2024 and January 2, 2023 are set forth below: (in thousands) January 1, 2024 January 2, 2023 Deferred tax assets (liabilities): Allowance for doubtful accounts $ 30 $ 40 Goodwill 3,503 4,625 Fixed Assets 2,307 2,164 Deferred franchise fees 187 277 Deferred rent — — Stock compensation 1,210 1,730 Net operating losses, Federal 17,116 13,649 Net operating losses, State 3,264 2,691 Deferred payroll taxes — — Interest expense 7,309 5,351 Lease liability 14,128 13,104 Tax credits 2,951 1,854 Other 1,418 1,599 Gross deferred tax assets 53,423 47,084 Valuation allowance (29,166) (22,629) Net deferred tax assets 24,257 24,455 Intangible assets (13,571) (13,878) Lease ROU asset (11,832) (11,800) Fixed assets — — Deferred tax liabilities (25,403) (25,678) Total net deferred tax liabilities $ (1,146) $ (1,223) |
Schedule of Unrecognized Tax Benefits | The following table summarizes the Company's unrecognized tax benefits at January 1, 2024 and January 2, 2023: (in thousands) January 1, 2024 January 2, 2023 Beginning balance $ 229 $ 660 Additions based on tax positions related to the current year — — Additions for tax positions of prior years — — Reductions for positions of prior years (229) (431) Ending balance $ — $ 229 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
Stockholders' Equity Note [Abstract] | |
Summary of Activity of Restricted Stock Units | The following table summarizes activity of RSUs and PSUs issued under the Plan during the year ended January 1, 2024: Service Condition Performance 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 January 2, 2023 162,000 $ 14.65 1,051,100 $ 12.62 232,500 $ 5.34 Granted 330,960 1.30 496,000 1.19 — — Vested (358,595) 5.25 (283,487) 13.66 (52,500) $ 6.40 Forfeited (84,365) 1.59 (191,063) 5.85 (140,000) 5.38 Non-vested at January 1, 2024 50,000 $ 15.70 1,072,550 $ 8.27 40,000 3.37 Performance Condition Service Condition Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at January 2, 2023 — $ — — $ — Granted 700,000 $ 1.57 700,000 $ 1.57 Vested — — — — Forfeited — — — — Non-vested at January 1, 2024 700,000 $ 1.57 700,000 $ 1.57 January 1, 2024 January 2, 2023 Risk-free interest rate 4.25 % 4.14 % Expected life in years 2.0 3.0 Expected volatility 98.0 % 68.0 % Expected dividend yield 0 % 0 % |
Share-based Payment Arrangement, Performance Shares, Valuation Assumptions | The input variables are noted in the table below: Year Ended January 2, 2023 Risk-free interest rate 0.4% - 4.1% Expected life in years 2 Expected volatility 57.3% - 65.9% Expected dividend yield * —% * The Monte Carlo method assumes a reinvestment of dividends. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
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 1, 2024 and January 2, 2023. Items Measured at Fair Value at January 1, 2024 - Debt Instruments (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 — 182 — Total $ — $ 182 $ — 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 $ — |
Input Variable for Black-Scholes Model | The following table summarizes activity of RSUs and PSUs issued under the Plan during the year ended January 1, 2024: Service Condition Performance 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 January 2, 2023 162,000 $ 14.65 1,051,100 $ 12.62 232,500 $ 5.34 Granted 330,960 1.30 496,000 1.19 — — Vested (358,595) 5.25 (283,487) 13.66 (52,500) $ 6.40 Forfeited (84,365) 1.59 (191,063) 5.85 (140,000) 5.38 Non-vested at January 1, 2024 50,000 $ 15.70 1,072,550 $ 8.27 40,000 3.37 Performance Condition Service Condition Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at January 2, 2023 — $ — — $ — Granted 700,000 $ 1.57 700,000 $ 1.57 Vested — — — — Forfeited — — — — Non-vested at January 1, 2024 700,000 $ 1.57 700,000 $ 1.57 January 1, 2024 January 2, 2023 Risk-free interest rate 4.25 % 4.14 % Expected life in years 2.0 3.0 Expected volatility 98.0 % 68.0 % Expected dividend yield 0 % 0 % |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jan. 01, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following table presents segment revenue and a reconciliation of adjusted EBITDA to net loss by segment: Consolidated Anthony’s BurgerFi (in thousands) January 1, January 2, January 1, January 2, January 1, January 2, Revenue by Segment $ 170,100 $ 178,720 $ 125,637 $ 128,819 $ 44,463 $ 49,901 Net Loss $ (30,708) $ (103,432) $ (3,132) (53,057) $ (27,576) (50,375) Goodwill impairment — 66,569 — 49,064 — 17,505 Asset impairment charges 4,524 6,946 1,240 256 3,284 6,690 Employee retention credits — (2,626) — — — (2,626) Share-based compensation expense 5,612 10,239 188 — 5,424 10,239 Depreciation and amortization expense 13,154 17,138 4,544 7,567 8,610 9,571 Interest expense 8,828 8,659 4,766 4,816 4,062 3,843 Restructuring costs 2,657 1,459 1,068 763 1,589 696 Merger, acquisition and integration costs 818 2,787 127 154 691 2,633 Legal settlements 564 1,623 99 35 465 1,588 Store closure costs 587 1,949 303 16 284 1,933 (Gain) on change in value of warrant liability (13) (2,511) — — (13) (2,511) Pre-opening costs 203 474 — — 203 474 (Gain) loss on sale of assets (93) (15) (94) 19 1 (34) Income tax (benefit) expense (65) (95) (61) (335) (4) 240 Adjusted EBITDA $ 6,068 $ 9,164 $ 9,048 $ 9,298 $ (2,980) $ (134) The following table summarizes information for the Company’s capital expenditures, long lived assets (including property and equipment, net and operating lease right-of-use assets), and total assets by segment as of and for the years ended January 1, 2024 and January 2, 2023: (in thousands) January 1, 2024 January 2, 2023 Capital Expenditures: BurgerFi $ 1,573 $ 1,428 Anthony’s 930 $ 1,089 Total $ 2,503 $ 2,517 Long-lived assets: BurgerFi $ 19,184 $ 20,093 Anthony’s 42,989 $ 45,019 Total $ 62,173 $ 65,112 Total Assets: BurgerFi $ 120,792 $ 136,810 Anthony’s 137,684 $ 139,970 Total $ 258,476 $ 276,780 |
Organization (Details)
Organization (Details) | Jan. 01, 2024 brand store | Jan. 02, 2023 store | Dec. 31, 2021 store |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 168 | 174 | |
Number of brands | brand | 2 | ||
Corporate-owned | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 87 | 85 | |
Franchised | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 81 | 89 | |
BurgerFi | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 108 | 114 | 118 |
BurgerFi | Corporate-owned | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 28 | 25 | 25 |
BurgerFi | Franchised | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 80 | 89 | 93 |
Anthony's | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 60 | 60 | 61 |
Anthony's | Corporate-owned | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 59 | 60 | 61 |
Anthony's | Franchised | |||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 1 | 0 | 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2020 USD ($) | Jan. 01, 2024 USD ($) renewalOption state shares | Jan. 02, 2023 USD ($) store | Dec. 31, 2021 USD ($) | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Number of international stores | store | 1 | |||
Cash and cash equivalents | $ 7,556,000 | $ 11,917,000 | ||
Allowance for uncollectible accounts | 100,000 | 200,000 | ||
Other income, employee retention credits | 400,000 | 2,600,000 | ||
Collected preparation fees | 3,000,000 | |||
Asset held for sale | 732,000 | 732,000 | ||
Asset impairment | 4,524,000 | 6,946,000 | ||
Impairment of long-lived assets | 1,794,000 | 3,100,000 | ||
Lease asset impairment | 2,617,000 | 3,846,000 | ||
Goodwill impairment | 0 | 66,569,000 | ||
Impairment of intangible assets | $ 113,000 | $ 0 | ||
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset impairment | Asset impairment | ||
Amortization of debt issuance costs | $ 520,000 | $ 514,000 | ||
Number of states in which entity operates | state | 19 | |||
Percentage of total franchise fee | 50% | |||
Sales tax payable | $ 800,000 | 1,000,000 | ||
Advertising expenses | 1,200,000 | 2,400,000 | ||
Revenues | 170,100,000 | 178,720,000 | ||
Brand development, co-op and advertising expense | 4,233,000 | 3,870,000 | ||
Pre-opening costs | 203,000 | 474,000 | ||
Unrecognized tax benefits | 0 | 229,000 | $ 660,000 | |
Liquor licenses | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Liquor licenses | 5,818,000 | 6,678,000 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Gain on sale of assets | 100,000 | |||
Disposal Group, Held-for-Sale, Not Discontinued Operations | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Intangible asset fair value | 800,000 | |||
Term loan | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Long-term debt | $ 53,253,000 | 54,507,000 | ||
Building | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Operating lease initial obligation period | 10 years | |||
Number of renewal options | renewalOption | 2 | |||
Operating lease renewal period | 5 years | |||
Two Distributors | Purchasing Benchmark | Supplier Concentration Risk | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk percentage | 89% | |||
BF Dania Beach, LLC | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Cash deposits returned to unrelated third-party purchaser | $ 900,000 | |||
Asset held for sale | $ 700,000 | 700,000 | ||
Credit Agreement | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Deferred financing costs | 100,000 | 900,000 | ||
Amortization of debt issuance costs | 500,000 | 500,000 | ||
Brand Development and Co-op Advertising Expenses | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Revenues | 1,400,000 | 1,400,000 | ||
Brand development, co-op and advertising expense | 2,700,000 | 1,800,000 | ||
Brand Development and Co-op Advertising Expenses | South Florida | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Advertising expenses | 700,000 | 800,000 | ||
Revenues | $ 400,000 | 400,000 | ||
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 | |||
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 | 2,562,550 | |||
Maximum | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Federal deposit insurance corporation insured amount | $ 250,000 | |||
Amount Due from Commercial Credit Card Companies | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Cash and cash equivalents | $ 1,900,000 | $ 2,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Store Activity (Details) - store | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Store Activity [Roll Forward] | ||
Stores, beginning of year | 174 | |
Stores, end of year | 168 | 174 |
BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 114 | 118 |
Number of stores opened | 8 | 11 |
Number of stores transferred/sold | 0 | 0 |
Number of stores closed during the year | (14) | (15) |
Stores, end of year | 108 | 114 |
Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 60 | 61 |
Number of stores opened | 1 | 0 |
Number of stores closed during the year | (1) | (1) |
Stores, end of year | 60 | 60 |
Corporate-owned | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 85 | |
Stores, end of year | 87 | 85 |
Corporate-owned | BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 25 | 25 |
Number of stores opened | 0 | 3 |
Number of stores transferred/sold | 4 | (3) |
Number of stores closed during the year | (1) | 0 |
Stores, end of year | 28 | 25 |
Corporate-owned | Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 60 | 61 |
Number of stores opened | 0 | 0 |
Number of stores closed during the year | (1) | (1) |
Stores, end of year | 59 | 60 |
Franchised | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 89 | |
Stores, end of year | 81 | 89 |
Franchised | BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 89 | 93 |
Number of stores opened | 8 | 8 |
Number of stores transferred/sold | (4) | 3 |
Number of stores closed during the year | (13) | (15) |
Stores, end of year | 80 | 89 |
Franchised | Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 0 | 0 |
Number of stores opened | 1 | 0 |
Number of stores closed during the year | 0 | 0 |
Stores, end of year | 1 | 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment (Details) | Jan. 01, 2024 |
Minimum | Kitchen equipment and other equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Minimum | Computers and office equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 3 years |
Minimum | Furniture and fixtures | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Minimum | Vehicles | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Maximum | Kitchen equipment and other equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 7 years |
Maximum | Computers and office equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 5 years |
Maximum | Furniture and fixtures | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 7 years |
Maximum | Vehicles | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of property and equipment | 7 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Definite-Lived Intangible Assets (Details) | Jan. 01, 2024 |
Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Lease term | 5 years |
Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Lease term | 10 years |
Franchise agreements | |
Finite Lived Intangible Assets [Line Items] | |
Useful life | 7 years |
Trade names | |
Finite Lived Intangible Assets [Line Items] | |
Useful life | 30 years |
License agreements | |
Finite Lived Intangible Assets [Line Items] | |
Useful life | 2 years |
VegiFi product | |
Finite Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 31,621 | $ 98,000 |
Adjustment to goodwill acquired | 190 | |
Impairment loss | 0 | (66,569) |
Goodwill, ending balance | 31,621 | 31,621 |
BurgerFi | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | 17,505 |
Adjustment to goodwill acquired | 0 | |
Impairment loss | 0 | (17,505) |
Goodwill, ending balance | 0 | 0 |
Anthony's | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 31,621 | 80,495 |
Adjustment to goodwill acquired | 190 | |
Impairment loss | 0 | (49,064) |
Goodwill, ending balance | $ 31,621 | $ 31,621 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Restructuring Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 2,657 | $ 1,459 |
Expenses related to financing | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 1,168 | 660 |
Severance and onboarding costs associated with change in CEO and CFO | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 1,489 | $ 799 |
Summary of Significant Accou_10
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. 01, 2024 | Jan. 02, 2023 | |
Numerator: | ||
Net loss available to common stockholders | $ (30,708) | $ (103,432) |
Denominator: | ||
Weighted-average shares outstanding, basic (in shares) | 25,521,098 | 22,173,694 |
Weighted-average shares outstanding, diluted (in shares) | 25,521,098 | 22,173,694 |
Basic net loss per common share (in dollars per share) | $ (1.20) | $ (4.66) |
Diluted net loss per common share (in dollars per share) | $ (1.20) | $ (4.66) |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Summary of Contract Balances (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Accounting Policies [Abstract] | ||
Franchising receivables | $ 137 | $ 168 |
Gift card liability | 2,205 | 1,847 |
Unearned revenue, current | 19 | 84 |
Unearned revenue, long-term | $ 726 | $ 1,008 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Summary of Franchise Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Franchise Fees | ||
Disaggregation Of Revenue [Line Items] | ||
Recognized revenue | $ 613 | $ 1,806 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Analysis of Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Contract With Customer, Liability Activity [Roll Forward] | ||
Balance, beginning of period | $ 1,092 | $ 2,577 |
Initial/Transfer franchise fees received | 265 | 364 |
Revenue recognized for stores open and transfers during period | (137) | (325) |
Revenue recognized related to franchise agreement terminations | (418) | (1,481) |
Other unearned revenue (recognized) received | (57) | (43) |
Balance, end of period | $ 745 | $ 1,092 |
Property & Equipment- Summary o
Property & Equipment- Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | $ 30,659 | $ 29,407 |
Less: Accumulated depreciation and amortization | (14,538) | (10,036) |
Property & equipment – net | 16,121 | 19,371 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 17,579 | 17,029 |
Kitchen equipment and other equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 8,708 | 8,196 |
Computers and office equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 1,536 | 1,468 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 2,828 | 2,677 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | $ 8 | $ 37 |
Property & Equipment (Details)
Property & Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 4,700 | $ 8,700 |
Long-lived assets | $ 1,794 | $ 3,100 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Summary of Components of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Finite Lived Intangible Assets [Line Items] | ||
Amount | $ 177,580 | $ 177,580 |
Accumulated Amortization | (24,836) | (16,344) |
Accumulated Impairment Charges | (7,706) | (7,706) |
Total | 145,038 | 153,530 |
Total intangible assets, gross | 183,510 | 184,258 |
Total intangible assets, accumulated impairment | (7,818) | (7,706) |
Total intangible assets, net | $ 150,856 | $ 160,208 |
Franchise agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 4 years | 5 years |
Amount | $ 24,839 | $ 24,839 |
Accumulated Amortization | (10,793) | (7,244) |
Accumulated Impairment Charges | 0 | 0 |
Total | $ 14,046 | $ 17,595 |
Trade names / trademarks | BurgerFi | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 27 years | 28 years |
Amount | $ 83,033 | $ 83,033 |
Accumulated Amortization | (8,419) | (5,650) |
Accumulated Impairment Charges | 0 | 0 |
Total | $ 74,614 | $ 77,383 |
Trade names / trademarks | Anthony's | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 27 years 9 months 18 days | 28 years 9 months 18 days |
Amount | $ 60,690 | $ 60,690 |
Accumulated Amortization | (4,383) | (2,359) |
Accumulated Impairment Charges | 0 | 0 |
Total | $ 56,307 | $ 58,331 |
Other intangibles | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (years) | 7 years | 8 years |
Amount | $ 9,018 | $ 9,018 |
Accumulated Amortization | (1,241) | (1,091) |
Accumulated Impairment Charges | (7,706) | (7,706) |
Total | 71 | 221 |
Liquor licenses | ||
Finite Lived Intangible Assets [Line Items] | ||
Liquor licenses, amount | 5,930 | 6,678 |
Liquor licenses, impairment charges | (113) | |
Liquor licenses | $ 5,818 | $ 6,678 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Goodwill Roll-forward (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 | Dec. 31, 2021 |
Goodwill [Line Items] | |||
Goodwill | $ 204,665 | $ 204,665 | |
Accumulated impairment losses | (173,045) | (173,045) | |
Goodwill, Total | 31,621 | 31,621 | $ 98,000 |
Anthony's | |||
Goodwill [Line Items] | |||
Goodwill | 80,684 | 80,684 | |
Accumulated impairment losses | (49,064) | (49,064) | |
Goodwill, Total | 31,621 | 31,621 | 80,495 |
BurgerFi | |||
Goodwill [Line Items] | |||
Goodwill | 123,981 | 123,981 | |
Accumulated impairment losses | (123,981) | (123,981) | |
Goodwill, Total | $ 0 | $ 0 | $ 17,505 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Finite Lived Intangible Assets [Line Items] | ||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income, net | |
Impairment of intangible assets | $ 113 | $ 0 |
Amortization expense | 8,500 | $ 8,500 |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||
Finite Lived Intangible Assets [Line Items] | ||
Gain on sale of assets | 100 | |
Disposal Group, Held-for-Sale, Not Discontinued Operations | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset fair value | $ 800 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net - Summary of Components of Related Amortization Expense (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 8,353 | |
2025 | 8,353 | |
2026 | 8,353 | |
2027 | 8,205 | |
2028 | 4,804 | |
Thereafter | 106,970 | |
Total | $ 145,038 | $ 153,530 |
Impairment - Narrative (Details
Impairment - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2024 | Jan. 02, 2023 | Dec. 31, 2021 | |
Finite Lived Intangible Assets [Line Items] | |||
Non-cash impairment charges | $ 4,524 | $ 73,515 | |
Goodwill impairment | 0 | 66,569 | |
Goodwill | $ 31,621 | 31,621 | $ 98,000 |
Percentage increase in discount rate | 1% | ||
Percentage decrease in cash flows | 5% | ||
Impairment of intangible assets | $ 113 | 0 | |
BurgerFi | |||
Finite Lived Intangible Assets [Line Items] | |||
Non-cash impairment charges | 3,300 | 6,700 | |
Goodwill impairment | 17,500 | ||
Goodwill | 0 | ||
Anthony's | |||
Finite Lived Intangible Assets [Line Items] | |||
Non-cash impairment charges | $ 1,200 | 200 | |
Goodwill impairment | $ 49,100 |
Impairment - Schedule of Impair
Impairment - Schedule of Impairment Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment | $ 0 | $ 66,569 |
Indefinite-lived intangible assets | 113 | 0 |
Long-lived assets | 1,794 | 3,100 |
Right-of-use assets | 2,617 | 3,846 |
Total non-cash impairment charge | $ 4,524 | $ 73,515 |
Related Party Transactions (Det
Related Party Transactions (Details) $ / shares in Units, $ in Thousands | 5 Months Ended | 12 Months Ended | ||||||||||
Jun. 03, 2023 USD ($) $ / shares shares | Feb. 24, 2023 USD ($) | Jan. 03, 2023 USD ($) shares | Jan. 03, 2022 shares | Jun. 03, 2023 $ / shares | Jan. 01, 2024 USD ($) store shares | Jan. 02, 2023 USD ($) store | Feb. 01, 2023 USD ($) | Mar. 01, 2022 ft² | Feb. 28, 2022 ft² | Nov. 03, 2021 USD ($) | Apr. 30, 2021 USD ($) | |
Related Party Transaction [Line Items] | ||||||||||||
Share-based compensation expense | $ 5,612 | $ 10,239 | ||||||||||
Shares issued in private placement (in shares) | shares | 2,868,853 | |||||||||||
Shares issued in private placement, issuance price (in dollars per share) | $ / shares | $ 1.22 | $ 1.22 | ||||||||||
Shares issued in private placement | $ 3,400 | 3,436 | ||||||||||
Percentage of stock held by investor | 11% | |||||||||||
Stores Acquired From Stockholder | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Consideration paid | 900 | |||||||||||
Cash | $ 500 | |||||||||||
Shares issued to acquire business (in shares) | shares | 200,000 | |||||||||||
Class of stock | $ 400 | |||||||||||
Fair value of net liabilities | $ 100 | |||||||||||
Number of stores acquired or transferred | store | 2 | |||||||||||
Royalty and other fees | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Other revenues | $ 7,492 | 9,733 | ||||||||||
Junior Subordinated Debt | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt instrument, face amount | $ 15,100 | |||||||||||
New Junior Subordinated Secured Notes | Junior Subordinated Debt | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt instrument, face amount | $ 5,100 | |||||||||||
Credit Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt instrument, face amount | $ 5,100 | |||||||||||
Credit Agreement | Term loan | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt instrument, face amount | $ 57,800 | |||||||||||
Debt forgiven | $ 10,000 | |||||||||||
Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Due from related companies | 0 | 300 | ||||||||||
Related Party | Royalty and other fees | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Other revenues | 100 | |||||||||||
Related Party | Entity Under Common Ownership With Significant Shareholder | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Operating lease cost | 700 | 500 | ||||||||||
Related Party | Leased Building Space | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Operating lease cost | $ 0 | $ 100 | ||||||||||
Affiliated Entity | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of stores acquired or transferred | store | 4 | 2 | ||||||||||
Affiliated Entity | Entity Under Common Ownership With Significant Shareholder | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Area of real estate property | ft² | 18,500 | 16,500 | ||||||||||
Affiliated Entity | Leased Building Space | Entity Under Common Ownership With Significant Shareholder | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Operating lease initial obligation period | 36 months | |||||||||||
Affiliated Entity | Leased Building Space Amendment | Entity Under Common Ownership With Significant Shareholder | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Operating lease initial obligation period | 10 years | |||||||||||
Affiliated Entity | Independent Contractor Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Monthly required payment | $ 100 | |||||||||||
Share-based compensation expense | $ 100 | $ 100 | ||||||||||
Restricted Stock Units (RSUs) | Affiliated Entity | Strategic Advisory Services 2023 Program | Consultant | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Share-based compensation expense | $ 100 | |||||||||||
Restricted Stock Units (RSUs) | Affiliated Entity | Strategic Advisory Services 2022 Program | Consultant | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Share-based compensation expense | $ 200 | $ 400 | ||||||||||
Unrestricted Stock Award (RSAs) | Affiliated Entity | Consultant | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares granted (in shares) | shares | 38,000 | 38,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 1 Months Ended | 18 Months Ended | |||||||
Jul. 05, 2023 USD ($) | Jan. 11, 2023 USD ($) shares | Mar. 28, 2022 USD ($) | Aug. 11, 2021 USD ($) claim | May 21, 2021 USD ($) | Feb. 29, 2020 USD ($) | Aug. 26, 2022 USD ($) | Jan. 01, 2024 USD ($) shares | Jan. 02, 2023 shares | |
Commitments And Contingencies [Line Items] | |||||||||
Issuance of common stock (in shares) | shares | 26,832,691 | 26,832,691 | |||||||
Conditional purchase obligations | $ 5.7 | ||||||||
Lion Point Capital Allegation | Pending Litigation | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Loss contingency, damages sought | $ 26 | ||||||||
Second 82nd SM, LLC c BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. | Pending Litigation | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Loss contingency, damages sought | $ 1.5 | ||||||||
Pending claims | claim | 7 | ||||||||
Second 82nd SM, LLC c BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. | Settled Litigation | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Loss contingency, damages sought | $ 1.2 | ||||||||
Burger Guys of Dania Pointe, et. al | Pending Litigation | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Loss contingency, damages sought | $ 2 | ||||||||
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 | ||||||||
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 | ||||||||
Loss contingency payments | $ 0.5 | ||||||||
Issuance of common stock (in shares) | shares | 200,000 | ||||||||
Loss contingency, damages paid, value | $ 0.8 | ||||||||
Employee Retention Claims | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Estimate of possible loss | $ 0.5 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Nov. 03, 2021 | Jan. 01, 2024 | Jan. 02, 2023 | |
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 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 | |
Redeemable preferred stock, fair value | $ 55.6 | $ 51.4 | |
Fair value adjustment of mandatorily redeemable preferred stock interest expense | 4.2 | $ 3.9 | |
Preferred Stock, Dividend, Quarterly Period From 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% | ||
Mandatorily redeemable preferred stock, dividend compound rate, quarterly percentage | 0.35% | ||
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 USD 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. 01, 2024 | Jan. 02, 2023 |
Debt Instrument [Line Items] | ||
Finance lease liability | $ 1,576 | $ 933 |
Total Debt | 70,630 | 70,220 |
Less: Unamortized debt discount related party note | (612) | (765) |
Less: Unamortized debt issuance costs | (978) | (1,441) |
Total Debt, net | 69,040 | 68,014 |
Less: Short-term borrowing, including finance leases | (52,834) | (4,985) |
Total Long-term borrowings, including finance leases and related party note | 16,206 | 63,029 |
Related Party | ||
Debt Instrument [Line Items] | ||
Total Long-term borrowings, including finance leases and related party note | 14,488 | 9,235 |
Nonrelated Party | ||
Debt Instrument [Line Items] | ||
Total Long-term borrowings, including finance leases and related party note | 1,718 | 53,794 |
Term loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | 53,253 | 54,507 |
Notes Payable | Nonrelated Party | ||
Debt Instrument [Line Items] | ||
Long-term debt | 701 | 780 |
Notes Payable | Related party note payable | Related Party | ||
Debt Instrument [Line Items] | ||
Long-term debt | 15,100 | 10,000 |
Revolving line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 0 | $ 4,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Feb. 24, 2023 USD ($) | Nov. 03, 2021 USD ($) | Dec. 30, 2024 | Sep. 30, 2024 | Jul. 01, 2024 | Apr. 01, 2024 | Jan. 01, 2024 USD ($) | Jan. 01, 2024 USD ($) | Jan. 02, 2023 USD ($) | Dec. 31, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Jun. 16, 2023 USD ($) | Mar. 31, 2023 | Feb. 01, 2023 USD ($) | Jan. 03, 2023 | Dec. 31, 2022 | Mar. 09, 2022 | |
Debt Instrument [Line Items] | ||||||||||||||||||||
Unamortized discount | $ 612 | $ 612 | $ 765 | |||||||||||||||||
Long-term borrowings and Related party note payable | 16,206 | 16,206 | 63,029 | |||||||||||||||||
Amortization of debt issuance costs | 520 | 514 | ||||||||||||||||||
Related Party | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Long-term borrowings and Related party note payable | $ 14,488 | 14,488 | 9,235 | |||||||||||||||||
Interest expense | $ 502 | 0 | ||||||||||||||||||
Junior Subordinated Debt | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, face amount | $ 15,100 | |||||||||||||||||||
Notes Payable, Noncurrent | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Stated interest rate | 7% | 7% | ||||||||||||||||||
Debt instrument, term | 7 years | |||||||||||||||||||
Small Business Administration (“SBA”) Economic Injury Disaster Loan | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Stated interest rate | 3.70% | 3.70% | ||||||||||||||||||
Debt instrument, term | 30 years | |||||||||||||||||||
Credit Agreement | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, face amount | 5,100 | |||||||||||||||||||
Incremental deferred interest, annual percentage | 1% | 2% | ||||||||||||||||||
Deferred interest payable | $ 300 | |||||||||||||||||||
Unamortized discount | $ 1,300 | $ 1,300 | ||||||||||||||||||
Debt covenant, net cash proceeds | 5,000 | 5,000 | 5,000 | |||||||||||||||||
Liquidity requirement | 9,500 | |||||||||||||||||||
Deferred financing costs | $ 100 | 100 | 900 | |||||||||||||||||
Amortization of debt issuance costs | $ 500 | $ 500 | ||||||||||||||||||
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 From June 16, 2023 Through December 31, 2023 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Stated interest rate | 6.75% | 6.75% | ||||||||||||||||||
Credit Agreement | Interest Period From January 1, 2024 Through June 15, 2024 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Stated interest rate | 7.25% | 7.25% | ||||||||||||||||||
Credit Agreement | Interest Period From June 15, 2024 Through Maturity | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Stated interest rate | 7.75% | 7.75% | ||||||||||||||||||
Credit Agreement | Interest Period From January 1, 2023 Through June 15, 2023 | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Stated interest rate | 5.75% | 5.75% | ||||||||||||||||||
Credit Agreement | Term loan | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, face amount | $ 57,800 | |||||||||||||||||||
Debt exchanged | $ 10,000 | |||||||||||||||||||
Debt forgiven | $ 10,000 | |||||||||||||||||||
Credit Agreement | Revolving line of credit | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Line of credit, maximum borrowing capacity | 4,000 | |||||||||||||||||||
Repayment of line of credit | $ 800 | |||||||||||||||||||
Senior lease-adjusted leverage ratio (greater than) | 7 | 6.50 | 7 | 7 | ||||||||||||||||
Minimum fixed charge coverage ratio | 1 | 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) | 6.75 | 6.50 | 6.75 | 6.75 | ||||||||||||||||
Minimum fixed charge coverage ratio | 1.10 | 1.05 | 1.05 | 1.05 | ||||||||||||||||
Credit Agreement | Loans Payable, Noncurrent | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Unamortized discount | $ 1,300 | $ 1,300 | ||||||||||||||||||
Deferred financing costs | 1,000 | 1,000 | $ 900 | |||||||||||||||||
Amortization of debt issuance costs | 200 | 500 | ||||||||||||||||||
Credit Agreement | Loans Payable, Noncurrent | Related Party | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Long-term borrowings and Related party note payable | $ 14,500 | $ 14,500 | ||||||||||||||||||
New Junior Subordinated Secured Notes | Junior Subordinated Debt | ||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||
Debt instrument, face amount | $ 5,100 | |||||||||||||||||||
Stated interest rate | 4% | 4% | ||||||||||||||||||
Interest expense | $ 500 |
Debt - Principal Payments (Deta
Debt - Principal Payments (Details) - Credit Agreement $ in Thousands | Jan. 01, 2024 USD ($) |
Maturities of Long-term Debt [Abstract] | |
2024 | $ 53,253 |
2025 | 0 |
2026 | 0 |
2027 | 15,100 |
Total | $ 68,353 |
Debt - Interest Incurred (Detai
Debt - Interest Incurred (Details) - Credit Agreement | Jan. 01, 2024 |
Interest Period One | |
Debt Instrument [Line Items] | |
Stated interest rate | 7.25% |
Interest Period Two | |
Debt Instrument [Line Items] | |
Stated interest rate | 7.75% |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Debt Instrument [Line Items] | ||
Amortization of debt issuance costs | $ 520 | $ 514 |
Amortization of related party note discount | 153 | 510 |
Non-cash interest on redeemable preferred stock | 4,211 | 3,892 |
Other interest expense (income) | (309) | (71) |
Interest expense | 8,828 | 8,659 |
Related Party | ||
Debt Instrument [Line Items] | ||
Interest on related party note | 502 | 0 |
Credit Agreement | ||
Debt Instrument [Line Items] | ||
Interest on credit agreement | 3,751 | 3,814 |
Amortization of debt issuance costs | $ 500 | $ 500 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Leases [Abstract] | ||
Base rent cost | $ 16.5 | $ 16.2 |
Leases - Adjustments to Balance
Leases - Adjustments to Balance Sheet (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 | Jan. 01, 2022 |
Lessor, Lease, Description [Line Items] | |||
Operating right-of-use asset, net | $ 46,052 | $ 45,741 | |
Finance right-of-use asset, net | 1,116 | 852 | |
Short-term operating lease liability | 10,111 | 9,924 | |
Short-term finance lease liability | 226 | 150 | |
Long-term operating lease liability | 44,631 | 40,748 | |
Long-term finance lease liability | $ 1,350 | $ 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 finance lease liability | 143 | ||
Long-term operating lease liability | 49,149 | ||
Long-term finance lease liability | $ 712 |
Leases - Summary of Finance and
Leases - Summary of Finance and Operating Lease Right-Of-Use Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Leases [Abstract] | ||
Operating right-of-use asset, net | $ 46,052 | $ 45,741 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property & equipment, net | Property & equipment, net |
Finance right-of-use asset, net | $ 1,116 | $ 852 |
Total right-of-use assets | 47,168 | 46,593 |
Short-term operating lease liability | 10,111 | 9,924 |
Long-term operating lease liability | $ 44,631 | $ 40,748 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Short-term borrowings, including finance leases | Short-term borrowings, including finance leases |
Short-term borrowings, including finance | $ 226 | $ 150 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term borrowings and Related party note payable | Long-term borrowings and Related party note payable |
Long-term borrowings, including finance | $ 1,350 | $ 783 |
Total lease liabilities | $ 56,318 | $ 51,605 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Lessor, Lease, Description [Line Items] | ||
Lease asset impairment | $ 2,617 | $ 3,846 |
Finance lease costs: | ||
Amortization of right-of use assets | 282 | 258 |
Interest on lease liabilities | 85 | 63 |
Less: Sublease income | (204) | (194) |
Total lease cost | 15,999 | 16,942 |
Occupancy and related expenses | ||
Lessor, Lease, Description [Line Items] | ||
Operating lease cost | 13,051 | 12,969 |
Pre-opening costs | ||
Lessor, Lease, Description [Line Items] | ||
Operating lease cost | 93 | 0 |
Store closure costs | ||
Lessor, Lease, Description [Line Items] | ||
Operating lease cost | $ 75 | $ 0 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Operating Leases | ||
2024 | $ 13,828 | |
2025 | 13,270 | |
2026 | 11,523 | |
2027 | 9,881 | |
2028 | 8,245 | |
2029 and thereafter | 9,884 | |
Total undiscounted lease payments | 66,631 | |
Less: present value adjustment | (11,889) | |
Total net lease liabilities | 54,742 | |
Finance Leases | ||
2024 | 362 | |
2025 | 348 | |
2026 | 319 | |
2027 | 287 | |
2028 | 263 | |
2029 and thereafter | 554 | |
Total undiscounted lease payments | 2,133 | |
Less: present value adjustment | (557) | |
Total net lease liabilities | $ 1,576 | $ 933 |
Leases - Lease Terms and Discou
Leases - Lease Terms and Discount Rates (Details) | Jan. 01, 2024 |
Weighted-average remaining lease term (in years): | |
Operating Leases | 5 years 6 months |
Finance Leases | 6 years 7 months 6 days |
Weighted-average discount rate: | |
Operating Leases | 7.60% |
Finance Leases | 9.60% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for (Benefit) From Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Current: | ||
U.S. Federal | $ 0 | $ 0 |
State | 13 | 35 |
Total current income tax expense | 13 | 35 |
Deferred: | ||
U.S. Federal | (6,117) | (10,002) |
State | (499) | (1,469) |
Total deferred income tax benefit | (6,616) | (11,471) |
Valuation allowance | 6,538 | 11,341 |
Total deferred income tax benefit, net of valuation allowance | (78) | (130) |
Total income tax benefit | $ (65) | $ (95) |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision at the U.S. federal statutory rate | $ (6,462) | $ (21,741) |
Permanent differences | 1,434 | 870 |
Share-based compensation | (33) | (463) |
State income taxes, net of federal benefit | (675) | (1,640) |
Change in warrant liability | (3) | (527) |
Goodwill impairment | 0 | 11,471 |
True-up | 221 | 1,983 |
Change in valuation allowance | 6,538 | 11,342 |
Change in rate | 13 | (249) |
Tax credits | (1,098) | (1,141) |
Total income tax benefit | $ (65) | $ (95) |
Income Taxes (Successor) - Sche
Income Taxes (Successor) - Schedule of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Deferred tax assets (liabilities): | ||
Allowance for doubtful accounts | $ 30 | $ 40 |
Goodwill | 3,503 | 4,625 |
Fixed Assets | 2,307 | 2,164 |
Deferred franchise fees | 187 | 277 |
Deferred rent | 0 | 0 |
Stock compensation | 1,210 | 1,730 |
Deferred payroll taxes | 0 | 0 |
Interest expense | 7,309 | 5,351 |
Lease liability | 14,128 | 13,104 |
Tax credits | 2,951 | 1,854 |
Other | 1,418 | 1,599 |
Gross deferred tax assets | 53,423 | 47,084 |
Valuation allowance | (29,166) | (22,629) |
Net deferred tax assets | 24,257 | 24,455 |
Intangible assets | 0 | 0 |
Lease ROU asset | (13,571) | (13,878) |
Fixed assets | (11,832) | (11,800) |
Deferred tax liabilities | (25,403) | (25,678) |
Total net deferred tax liabilities | (1,146) | (1,223) |
Federal | ||
Deferred tax assets (liabilities): | ||
Net operating losses | 17,116 | 13,649 |
State and Local Jurisdiction | ||
Deferred tax assets (liabilities): | ||
Net operating losses | $ 3,264 | $ 2,691 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Income Tax Textual [Line Items] | ||
Net operating losses | $ 81,500 | |
Recognized built-in loss carryforward | 3,700 | |
Valuation allowance | 29,166 | $ 22,629 |
State and Local Jurisdiction | ||
Income Tax Textual [Line Items] | ||
Net operating losses | 3,300 | |
Federal | ||
Income Tax Textual [Line Items] | ||
Net operating losses | $ 71,900 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 229 | $ 660 |
Additions based on tax positions related to the current year | 0 | 0 |
Additions for tax positions of prior years | 0 | 0 |
Reductions for positions of prior years | (229) | (431) |
Ending balance | $ 0 | $ 229 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jul. 10, 2023 shares | Jan. 03, 2023 shares | Jan. 01, 2024 USD ($) store $ / shares shares | Jan. 02, 2023 USD ($) $ / shares 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 USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, shares, outstanding (in shares) | 26,832,691 | 22,257,772 | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares outstanding (in shares) | 2,120,000 | 2,120,000 | ||
Warrants outstanding (in shares) | 15,063,800 | 15,063,800 | ||
Number of Shares that warrants exercisable for | 1 | 1 | ||
Warrants exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | ||
Warrants exercisable period | 30 days | |||
Number of shares issued under purchase option (in shares) | 750,000 | |||
Shares purchase price, per share (in Dollars per share) | $ / shares | $ 10 | |||
Share-based compensation expense | $ | $ 5,612 | $ 10,239 | ||
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% | |||
Inducement Awards Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Share-based compensation expense | $ | $ 200 | $ 0 | ||
CEO Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares purchased by CEO (in shares) | 63,500 | |||
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 | |||
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 | $ 0.05 | ||
Working Capital Warrants | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Warrants outstanding (in shares) | 150,000 | 150,000 | ||
Restricted Shares | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Service Condition | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ | $ 1,100 | $ 2,100 | ||
Performance Condition | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ | 2,900 | 3,700 | ||
Performance Condition | CEO Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common shares available for future grants (in shares) | 500,000 | |||
Shares expected to vest annually (in shares) | 100,000 | |||
Performance Condition | CFO Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common shares available for future grants (in shares) | 200,000 | |||
Shares expected to vest annually (in shares) | 40,000 | |||
Market Condition | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Plan modification cost | $ | 200 | |||
Market Condition | 2020 Omnibus Equity Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ | (100) | $ 600 | ||
Unrestricted Stock Award (RSAs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Employee benefits and share-based compensation | $ | 1,500 | |||
Unrestricted Stock Award (RSAs) | Consultant Principal | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares granted (in shares) | 38,000 | |||
Unrestricted Stock Award (RSAs) | Executive Officer | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Shares granted (in shares) | 1,141,750 | |||
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ | $ 8,500 | |||
Unrecognized stock-based compensation expense, weighted-average recognition period | 2 years 3 months 18 days | |||
Restricted Stock Units (RSUs) | Inducement Awards Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ | $ 1,900 | |||
Unrecognized stock-based compensation expense, weighted-average recognition period | 3 years 2 months 12 days | |||
Restricted Stock Units (RSUs) | CEO Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common shares available for future grants (in shares) | 500,000 | |||
Shares expected to vest annually (in shares) | 100,000 | |||
Restricted Stock Units (RSUs) | CFO Awards | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Common shares available for future grants (in shares) | 200,000 | |||
Shares expected to vest annually (in shares) | 40,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Activity of RSUs and PSUs (Details) | 12 Months Ended |
Jan. 01, 2024 $ / shares shares | |
Service Condition | |
Restricted Stock Units | |
Non-vested at January 2, 2023 (in shares) | shares | 162,000 |
Granted (in shares) | shares | 330,960 |
Vested (in shares) | shares | (358,595) |
Forfeited (in shares) | shares | (84,365) |
Non-vested at January 1, 2024 (in shares) | shares | 50,000 |
Weighted Average Grant Date Fair Value | |
Non-vested at January 2, 2023 (in dollars per shares) | $ / shares | $ 14.65 |
Granted (in dollars per share) | $ / shares | 1.30 |
Vested (in dollars per share) | $ / shares | 5.25 |
Forfeited (in dollars per share) | $ / shares | 1.59 |
Non-vested at January 1, 2024 (in dollars per shares) | $ / shares | $ 15.70 |
Performance Condition | |
Restricted Stock Units | |
Non-vested at January 2, 2023 (in shares) | shares | 1,051,100 |
Granted (in shares) | shares | 496,000 |
Vested (in shares) | shares | (283,487) |
Forfeited (in shares) | shares | (191,063) |
Non-vested at January 1, 2024 (in shares) | shares | 1,072,550 |
Weighted Average Grant Date Fair Value | |
Non-vested at January 2, 2023 (in dollars per shares) | $ / shares | $ 12.62 |
Granted (in dollars per share) | $ / shares | 1.19 |
Vested (in dollars per share) | $ / shares | 13.66 |
Forfeited (in dollars per share) | $ / shares | 5.85 |
Non-vested at January 1, 2024 (in dollars per shares) | $ / shares | $ 8.27 |
Market Condition | |
Restricted Stock Units | |
Non-vested at January 2, 2023 (in shares) | shares | 232,500 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (52,500) |
Forfeited (in shares) | shares | (140,000) |
Non-vested at January 1, 2024 (in shares) | shares | 40,000 |
Weighted Average Grant Date Fair Value | |
Non-vested at January 2, 2023 (in dollars per shares) | $ / shares | $ 5.34 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 6.40 |
Forfeited (in dollars per share) | $ / shares | 5.38 |
Non-vested at January 1, 2024 (in dollars per shares) | $ / shares | $ 3.37 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Input Variables (Details) - Performance Condition | 12 Months Ended |
Jan. 02, 2023 | |
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% |
Expected life in years | 2 years |
Expected volatility, minimum | 57.30% |
Expected volatility, maximum | 65.90% |
Expected dividend yield | 0% |
Stockholders' Equity - Activity
Stockholders' Equity - Activity of the Restricted Stock Units, Inducement Awards (Details) | 12 Months Ended |
Jan. 01, 2024 $ / shares shares | |
Performance Condition | |
Restricted Stock Units | |
Non-vested at January 2, 2023 (in shares) | shares | 0 |
Granted (in shares) | shares | 700,000 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Non-vested at January 1, 2024 (in shares) | shares | 700,000 |
Weighted Average Grant Date Fair Value | |
Non-vested at January 2, 2023 (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 1.57 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Non-vested at January 1, 2024 (in dollars per share) | $ / shares | $ 1.57 |
Service Condition | |
Restricted Stock Units | |
Non-vested at January 2, 2023 (in shares) | shares | 0 |
Granted (in shares) | shares | 700,000 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Non-vested at January 1, 2024 (in shares) | shares | 700,000 |
Weighted Average Grant Date Fair Value | |
Non-vested at January 2, 2023 (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 1.57 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Non-vested at January 1, 2024 (in dollars per share) | $ / shares | $ 1.57 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Hierarchy (Details) - USD ($) $ in Thousands | Jan. 01, 2024 | Jan. 02, 2023 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | $ 182 | $ 195 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 0 | |
Total | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 195 | |
Total | 182 | 195 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 0 | |
Total | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ / shares in Units, $ in Millions | Jan. 01, 2024 USD ($) $ / shares | Dec. 29, 2023 $ / shares | Jan. 02, 2023 $ / shares | Dec. 30, 2022 $ / shares |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Warrants exercise price (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | ||
Measurement Input, Share Price | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Warrant fair value (in dollars per share) | $ / shares | 0.86 | 1.26 | ||
Credit Agreement | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Short-term debt | $ | $ 53.3 | |||
Credit Agreement | Minimum | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of short-term debt | $ | 20 | |||
Credit Agreement | Maximum | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of short-term debt | $ | $ 40 | |||
Private Warrants | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Warrants exercise price (in dollars per share) | $ / shares | $ 0.05 | $ 0.05 |
Fair Value Measurements - Black
Fair Value Measurements - Black Scholes Measurement Inputs (Details) | Jan. 01, 2024 yr | Jan. 02, 2023 yr |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.0425 | 0.0414 |
Expected life in years | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 2 | 3 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.980 | 0.680 |
Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0 | 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Jan. 01, 2024 Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Segment Information - Segment R
Segment Information - Segment Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Segment Reporting Information [Line Items] | ||
Revenue by Segment | $ 170,100 | $ 178,720 |
Net loss | (30,708) | (103,432) |
Goodwill impairment | 0 | 66,569 |
Asset impairment | 4,524 | 6,946 |
Interest expense | 8,828 | 8,659 |
Restructuring costs | 2,657 | 1,459 |
Store closure costs | 587 | 1,949 |
Gain on change in value of warrant liability | (13) | (2,511) |
Pre-opening costs | 203 | 474 |
Income tax (benefit) expense | (65) | (95) |
Parent Company | ||
Segment Reporting Information [Line Items] | ||
Revenue by Segment | 170,100 | 178,720 |
Net loss | (30,708) | (103,432) |
Goodwill impairment | 0 | 66,569 |
Asset impairment | 4,524 | 6,946 |
Employee retention credits | 0 | (2,626) |
Share-based compensation expense | 5,612 | 10,239 |
Depreciation and amortization expense | 13,154 | 17,138 |
Interest expense | 8,828 | 8,659 |
Restructuring costs | 2,657 | 1,459 |
Merger, acquisition and integration costs | 818 | 2,787 |
Legal settlements | 564 | 1,623 |
Store closure costs | 587 | 1,949 |
Gain on change in value of warrant liability | (13) | (2,511) |
Pre-opening costs | 203 | 474 |
(Gain) loss on sale of assets | (93) | (15) |
Income tax (benefit) expense | (65) | (95) |
Adjusted EBITDA | 6,068 | 9,164 |
BurgerFi | ||
Segment Reporting Information [Line Items] | ||
Revenue by Segment | 44,463 | 49,901 |
Net loss | (27,576) | (50,375) |
Goodwill impairment | 0 | 17,505 |
Asset impairment | 3,284 | 6,690 |
Employee retention credits | 0 | (2,626) |
Share-based compensation expense | 5,424 | 10,239 |
Depreciation and amortization expense | 8,610 | 9,571 |
Interest expense | 4,062 | 3,843 |
Restructuring costs | 1,589 | 696 |
Merger, acquisition and integration costs | 691 | 2,633 |
Legal settlements | 465 | 1,588 |
Store closure costs | 284 | 1,933 |
Gain on change in value of warrant liability | (13) | (2,511) |
Pre-opening costs | 203 | 474 |
(Gain) loss on sale of assets | 1 | (34) |
Income tax (benefit) expense | (4) | 240 |
Adjusted EBITDA | (2,980) | (134) |
Anthony's | ||
Segment Reporting Information [Line Items] | ||
Revenue by Segment | 125,637 | 128,819 |
Net loss | (3,132) | (53,057) |
Goodwill impairment | 0 | 49,064 |
Asset impairment | 1,240 | 256 |
Employee retention credits | 0 | 0 |
Share-based compensation expense | 188 | 0 |
Depreciation and amortization expense | 4,544 | 7,567 |
Interest expense | 4,766 | 4,816 |
Restructuring costs | 1,068 | 763 |
Merger, acquisition and integration costs | 127 | 154 |
Legal settlements | 99 | 35 |
Store closure costs | 303 | 16 |
Gain on change in value of warrant liability | 0 | 0 |
Pre-opening costs | 0 | 0 |
(Gain) loss on sale of assets | (94) | 19 |
Income tax (benefit) expense | (61) | (335) |
Adjusted EBITDA | $ 9,048 | $ 9,298 |
Segment Information - Assets by
Segment Information - Assets by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 01, 2024 | Jan. 02, 2023 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Capital Expenditures: | $ 2,503 | $ 2,517 |
Long-lived assets: | 62,173 | 65,112 |
Total Assets: | 258,476 | 276,780 |
BurgerFi | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Capital Expenditures: | 1,573 | 1,428 |
Long-lived assets: | 19,184 | 20,093 |
Total Assets: | 120,792 | 136,810 |
Anthony's | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Capital Expenditures: | 930 | 1,089 |
Long-lived assets: | 42,989 | 45,019 |
Total Assets: | $ 137,684 | $ 139,970 |