RAVE Restaurant (RAVE) 10-Q 12 Nov 20 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Sep. 27, 2020	Nov. 04, 2020
Cover [Abstract]
Entity Registrant Name	RAVE RESTAURANT GROUP, INC.
Entity Central Index Key	0000718332
Current Fiscal Year End Date	--06-27
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		18,004,904
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 27, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Address, State or Province	TX

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract]
REVENUES:	$ 1,903	$ 2,876
COSTS AND EXPENSES:
Cost of sales	78	134
General and administrative expenses	1,089	1,363
Franchise expenses	547	866
Gain on sale of assets	0	(11)
Impairment of long-lived assets and other lease charges	17	148
Bad debt expense (recovery)	27	(8)
Interest expense	23	27
Depreciation and amortization expense	44	47
Total costs and expenses	1,825	2,566
INCOME BEFORE TAXES	78	310
Income tax expense	2	73
NET INCOME	$ 76	$ 237
INCOME PER SHARE OF COMMON STOCK - BASIC: (in dollars per share)	$ 0	$ 0.02
INCOME PER SHARE OF COMMON STOCK - DILUTED: (in dollars per share)	$ 0	$ 0.01
Weighted average common shares outstanding - basic (in shares)	15,451	15,106
Weighted average common and potential dilutive common shares outstanding (in shares)	16,249	15,924

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 27, 2020	Jun. 28, 2020
CURRENT ASSETS
Cash and cash equivalents	$ 2,936	$ 2,969
Restricted cash	234	234
Accounts receivable, less allowance for bad debts of $77 and $269, respectively	1,012	965
Notes receivable	484	546
Deferred contract charges	36	44
Prepaid expenses and other	218	174
Total current assets	4,920	4,932
LONG-TERM ASSETS
Property, plant and equipment, net	358	366
Operating lease right of use asset, net	3,421	3,567
Intangible assets definite-lived, net	146	155
Notes receivable, net of current portion	445	449
Long-term deferred contract charges	242	231
Deposits and other	0	5
Total assets	9,532	9,705
CURRENT LIABILITIES
Accounts payable - trade	469	446
Accounts payable - lease termination impairments	421	407
Accrued expenses	685	775
Operating lease liability, current	644	632
Deferred revenues	293	254
Total current liabilities	2,512	2,514
LONG-TERM LIABILITIES
Convertible notes	1,556	1,549
PPP loan	657	657
Operating lease liability, net of current portion	3,307	3,471
Deferred revenues, net of current portion	873	960
Other long-term liabilities	51	51
Total liabilities	8,956	9,202
COMMITMENTS AND CONTINGENCIES (SEE NOTE D)
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; authorized 26,000,000 shares; issued 22,550,376 and 22,550,376 shares, respectively; outstanding 15,465,222 and 15,465,222 shares, respectively	225	225
Additional paid-in capital	33,528	33,531
Accumulated deficit	(8,640)	(8,716)
Treasury stock at cost Shares in treasury: 7,085,154 and 7,085,154, respectively	(24,537)	(24,537)
Total shareholders' equity	576	503
Total liabilities and shareholders' equity	$ 9,532	$ 9,705

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 27, 2020	Jun. 28, 2020
CURRENT ASSETS
Accounts receivable, allowance for bad debts	$ 77	$ 269
SHAREHOLDERS' EQUITY
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	26,000,000	26,000,000
Common stock, shares issued (in shares)	22,550,376	22,550,376
Common stock, shares outstanding (in shares)	15,465,222	15,465,222
Treasury stock at cost (in shares)	7,085,154	7,085,154

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Treasury Stock [Member]	Total
Beginning balance at Jun. 30, 2019	$ 222	$ 33,327	$ (4,483)	$ (24,632)	$ 4,434
Beginning balance (in shares) at Jun. 30, 2019	22,208,000			(7,117,000)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of senior notes, net	$ 0	(31)	0	$ 95	64
Conversion of senior notes, net (in shares)	0			32,000
Equity issue costs - ATM Offering	$ 0	(2)	0	$ 0	(2)
Net income	0	0	237	0	237
Ending balance at Sep. 29, 2019	$ 222	33,294	(4,246)	$ (24,537)	4,733
Ending balance (in shares) at Sep. 29, 2019	22,208,000			(7,085,000)
Beginning balance at Jun. 28, 2020	$ 225	33,531	(8,716)	$ (24,537)	$ 503
Beginning balance (in shares) at Jun. 28, 2020	22,550,000			(7,085,000)	15,465,222
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity issue costs - ATM Offering	$ 0	(3)	0	$ 0	$ (3)
Net income	0	0	76	0	76
Ending balance at Sep. 27, 2020	$ 225	$ 33,528	$ (8,640)	$ (24,537)	$ 576
Ending balance (in shares) at Sep. 27, 2020	22,550,000			(7,085,000)	15,465,222

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 76	$ 237
Adjustments to reconcile net income to cash (used in) provided by operating activities:
Impairment of fixed assets and other assets	17	148
Depreciation and amortization	44	47
Amortization of operating right of use assets	146	115
Amortization of debt issue costs	7	9
Gain on the sale of assets	0	(11)
Provision for bad debt	27	(8)
Deferred income tax	0	71
Changes in operating assets and liabilities:
Accounts receivable	(74)	272
Notes receivable	62	0
Deferred contract charges	(3)	(3)
Inventories	0	1
Prepaid expenses and other	(44)	46
Deposits and other	5	1
Accounts payable - trade	23	(110)
Accounts payable - lease termination impairments	(3)	(373)
Accrued expenses	(90)	(47)
Operating lease liability	(152)	(120)
Deferred revenue	(48)	(122)
Deferred rent and other	0	(21)
Cash (used in) provided by operating activities	(7)	132
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments received on notes receivable from fixed asset sales	4	44
Purchase of property, plant and equipment	(27)	(17)
Cash (used in) provided by investing activities	(23)	27
CASH FLOWS FROM FINANCING ACTIVITIES:
Equity issuance costs	(3)	(2)
Cash (used in) financing activities	(3)	(2)
Net (decrease)/increase in cash, cash equivalents and restricted cash	(33)	157
Cash, cash equivalents and restricted cash, beginning of period	3,203	2,264
Cash, cash equivalents and restricted cash, end of period	3,170	2,421
CASH PAID FOR:
Interest	0	2
Income taxes	7	1
Non-cash activities:
Conversion of notes to common shares	0	64
Operating lease right of use assets at adoption	0	3,428
Operating lease liability at adoption	$ 0	$ 3,875

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Sep. 27, 2020
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note A - Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All appropriate intercompany balances and transactions have been eliminated. Reclassification Certain prior year amounts have been reclassified to conform with current year presentation. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted cash of $0.2 million at September 27, 2020 and June 28, 2020 is omitted from cash and cash equivalents and is included in current assets. The restricted cash is held in an interest-bearing money market account and is restricted pursuant to a letter of credit for an insurance claim dating back to the mid-1980’s. Fiscal Quarters The three month periods ended September 27, 2020 and September 29, 2019 each contained 13 weeks. Use of Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. The Company bases its estimates on historical experience and other various assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed periodically, and actual results could differ materially from estimates. Revenue Recognition Revenue is measured based on consideration specified in contracts with customers and excludes incentives and amounts collected on behalf of third parties, primarily sales tax. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. The following describes principal activities, separated by major product or service, from which the Company generates its revenues: Restaurant Sales Revenue from restaurant sales is recognized when food and beverage products are sold in Company-owned restaurants. The Company reports revenue net of sales taxes collected from customers and remitted to governmental taxing authorities. Franchise Revenues Franchise revenues consist of 1) franchise royalties, 2) supplier and distributor incentive revenues, 3) franchise license fees, 4) area development exclusivity fees and foreign master license fees, 5) advertising funds, and 6) supplier convention funds. Franchise royalties, which are based on a percentage of franchise restaurant sales, are recognized as sales occur. Supplier and distributor incentive revenues are recognized when title to the underlying commodities transfer. Franchise license fees are typically billed upon execution of the franchise agreement and amortized over the term of the franchise agreement which can range from five to 20 years. Fees received for renewal periods are amortized over the life of the renewal period. Area development exclusivity fees and foreign master license fees are typically billed upon execution of the area development and foreign master license agreements. Area development exclusivity fees are included in deferred revenue in the Condensed Consolidated Balance Sheets and allocated on a pro rata basis to all stores opened under that specific development agreement. Area development exclusivity fees that include rights to subfranchise are amortized as revenue over the term of the contract. Advertising fund contributions for Pie Five units represent contributions collected where we have control over the activities of the fund. Contributions are based on a percentage of net retail sales. The adoption of Topic 606 revised the determination of whether these arrangements are considered principal versus agent. For Pie Five, we have determined that we are the principal in these arrangements, and advertising fund contributions and expenditures are, therefore, reported on a gross basis in the Condensed Consolidated Statements of Income. In general, we expect such advertising fund contributions and expenditures to be largely offsetting and, therefore, do not expect a significant impact on our reported income before income taxes. Our obligation related to these funds is to develop and conduct advertising activities. Pie Five marketing fund contributions are billed and collected weekly. Supplier convention funds are deferred until the obligations of the agreement are met and the event takes place. Rental Income The Company also subleases some of its restaurant space to third parties. The Company’s two subleases have terms that end in 2023 and 2025. The sublease agreements are noncancelable through the end of the term and both parties have substantive rights to terminate the lease when the term is complete. Sublease agreements are not capitalized and are recorded as rental income in the period that rent is received. Total revenues consist of the following (in thousands): Three Months Ended September 27 , 2020 September 29 , 2019 Restaurant sales $ — $ 108 Franchise royalties 858 1,108 Supplier and distributor incentive revenues 767 1,023 Franchise license fees 102 211 Area development fees and foreign master license fees 4 7 Advertising funds 125 152 Supplier convention funds — 215 Rental income 48 41 Other (1 ) 11 $ 1,903 $ 2,876 Stock-Based Compensation The Company accounts for stock options using the fair value recognition provisions of the authoritative guidance on share-based payments. The Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future. The authoritative guidance also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow. Compensation cost for restricted stock units (“RSU’s”) is measured as an amount equal to the fair value of the RSU’s on the date of grant and is expensed over the vesting period if achievement of the performance criteria is deemed probable, with the amount of the expense recognized based on the best estimate of the ultimate achievement level.

Adoption of ASC 842, "Leases"

Adoption of ASC 842, "Leases"	3 Months Ended
	Sep. 27, 2020
Adoption of ASC 842, "Leases" [Abstract]
Adoption of ASC 842, "Leases"	Note B - Adoption of ASC 842, “Leases” In February 2016, FASB issued Accounting Standards Codification 842, Leases (“ASC 842”) which requires an entity to recognize a right of use asset and lease liability for all leases. Classification of leases as either a finance or operating lease determines the recognition, measurement and presentation of expenses. The new standard was effective for the Company in the first quarter of fiscal 2020 and was adopted using a modified retrospective approach with the date of initial application on July 1, 2019. Consequently, upon transition, the Company recognized an operating lease right of use asset and an operating lease liability. The Company applied the following practical expedients as provided in the standards update which provide elections to: ● not apply the recognition requirements to short-term leases (a lease that at commencement date has a lease term of 12 months or less and does not contain a purchase option); ● not reassess whether a contract contains a lease, lease classification and initial direct costs; and ● not reassess certain land easements in existence prior to July 1, 2019. Through the implementation process, the Company evaluated each of its lease arrangements and enhanced its systems to track and calculate additional information required upon adoption of this standards update. The adoption had an impact to the Condensed Consolidated Balance Sheet as of July 1, 2019 relating to the recognition of operating lease right of use assets and operating lease liabilities which represented approximately a 30% change to total assets and a 64% change to total liabilities. The impact of adoption of this new standards update was as follows (in thousands): July 1, 2019 Adoption Reclassification (1) Total Adjustment Operating lease right of use assets $ 3,428 $ 434 $ 3,862 Operating lease liabilities – current 528 528 Operating lease liabilities - long-term 3,347 3,347 (1) As of June 30, 2019, the Company had $132 thousand recorded within deferred rent for lease incentives incurred at the inception of the affected leases and $302 thousand in deferred rent tenant improvements. Upon adoption of the new standards update, these lease incentives were included within the lease liability. Adoption of the new standard did not materially impact the Condensed Consolidated Statements of Operations, Cash Flows or Shareholders’ Equity. Leases The Company determines if an arrangement is a lease at inception of the arrangement. To the extent that it can be determined that an arrangement represents a lease, it is classified as either an operating lease or a finance lease. The Company does not currently have any finance leases. The Company capitalizes operating leases on the Condensed Consolidated Balance Sheets through a right of use asset and a corresponding operating lease liability. Right of use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liability represent the Company’s obligation to make lease payments arising from the lease. Short-term leases that have an initial term of one year or less are not capitalized but are disclosed below. Operating lease right of use assets and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. In addition to the present value of lease payments, the operating lease right of use asset also includes any lease payments made to the lessor prior to lease commencement less any lease incentives and initial direct costs incurred. Lease expense is recognized on a straight-line basis over the lease term. Nature of Leases The Company leases certain office space, restaurant space, and information technology equipment under non-cancelable leases to support its operations. A more detailed description of significant lease types is included below. Office Agreements The Company rents office space from third parties for its corporate location. Office agreements are typically structured with non-cancelable terms of one to 10 years. The Company has concluded that its office agreements represent operating leases with a lease term that equals the primary non-cancelable contract term. Upon completion of the primary term, both parties have substantive rights to terminate the lease. As a result, enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term. Restaurant Space Agreements The Company rents restaurant space from third parties for its Company-owned restaurants. Restaurant space agreements are typically structured with non-cancelable terms of one to 10 years. The Company has concluded that its restaurant agreements represent operating leases with a lease term that equals the primary non-cancelable contract term. Upon completion of the primary term, both parties have substantive rights to terminate the lease. As a result, enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term. The Company also subleases some of its restaurant space to third parties. The Company’s two subleases have terms that end in 2023 and 2025. The sublease agreements are noncancelable through the end of the term and both parties have substantive rights to terminate the lease when the term is complete. Sublease agreements are not capitalized and are recorded as rental income in the period that rent is received. Information Technology Equipment The Company rents information technology equipment, primarily printers and copiers, from a third party for its corporate office location. Information technology equipment agreements are typically structured with non-cancelable terms of one to five years. The Company has concluded that its information technology equipment commitments are operating leases. Discount Rate Leases typically do not provide an implicit rate. Accordingly, the Company is required to use its incremental borrowing rate in determining the present value of lease payments based on the information available at commencement date. The Company’s incremental borrowing rate reflects the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company uses the implicit rate in the limited circumstances in which that rate is readily determinable. Lease Guarantees The Company has guaranteed the financial responsibilities of certain franchised store leases. These guaranteed leases are not considered operating leases because the Company does not have the right to control the underlying asset. If the franchisee abandons the lease and fails to meet the lease’s financial obligations, the lessor may assign the lease to the Company for the remainder of the term. If the Company does not expect to assign the abandoned lease to a new franchisee within 12 months, the lease will be considered an operating lease and a right-of-use asset and liability will be recognized. Practical Expedients and Accounting Policy Elections Certain lease agreements include lease and non-lease components. For all existing asset classes with multiple component types, the Company has utilized the practical expedient that exempts it from separating lease components from non-lease components. Accordingly, the Company accounts for the lease and non-lease components in an arrangement as a single lease component. In addition, for all existing asset classes, the Company has made an accounting policy election not to apply the lease recognition requirements to short-term leases (that is, a lease that, at commencement, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the Company is reasonably certain to exercise). Accordingly, we recognize lease payments related to our short-term leases in our statement of operations on a straight-line basis over the lease term which has not changed from our prior recognition. To the extent that there are variable lease payments, we recognize those payments in our statement of operations in the period in which the obligation for those payments is incurred. The components of total lease expense for the three months ended September 27, 2020, the majority of which is included in general and administrative expense, are as follows (in thousands): Three Months Ended September 27, 2020 Operating lease cost $ 670 Sublease income (195 ) Total lease expense, net of sublease income $ 475 Supplemental cash flow information related to operating leases is included in the table below (in thousands): Three Months Ended September 27, 2020 Cash paid for amounts included in the measurement of lease liabilities $ 193 Weighted average remaining lease term and weighted average discount rate for operating leases are as follows: September 27, 2020 Weighted average remaining lease term 5.0 Years Weighted average discount rate 4.0 % Operating lease liabilities with enforceable contract terms that are greater than one year mature as follows (in thousands): Operating Leases Remainder of fiscal year 2021 $ 593 2022 804 2023 813 2024 766 Thereafter 1,448 Total operating lease payments $ 4,424 Less: imputed interest (473 ) Total operating lease liability $ 3,951

Stock Purchase Plan

Stock Purchase Plan	3 Months Ended
	Sep. 27, 2020
Stock Purchase Plan [Abstract]
Stock Purchase Plan	Note C - Stock Purchase Plan On May 23, 2007, the Company’s board of directors approved a stock purchase plan (the “2007 Stock Purchase Plan”) authorizing the purchase of up to 1,016,000 shares of its common stock in the open market or in privately negotiated transactions. On June 2, 2008, the Company’s board of directors amended the 2007 Stock Purchase Plan to increase the number of shares of common stock the Company may repurchase by 1,000,000 shares to a total of 2,016,000 shares. On April 22, 2009, the Company’s board of directors amended the 2007 Stock Purchase Plan again to increase the number of shares of common stock the Company may repurchase by 1,000,000 shares to a total of 3,016,000 shares. The 2007 Stock Purchase Plan does not have an expiration date. There were no stock purchases in the fiscal quarters end ed September 27, 2020 or September 29, 2019.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Sep. 27, 2020
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note D - Commitments and Contingencies The Company is subject to various claims and contingencies related to employment agreements, franchise disputes, lawsuits, taxes, food product purchase contracts and other matters arising out of the normal course of business. Management believes that any such claims and actions currently pending are either covered by insurance or would not have a material adverse effect on the Company’s annual results of operations or financial condition if decided in a manner that is unfavorable to the Company.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Sep. 27, 2020
Stock-Based Compensation [Abstract]
Stock-Based Compensation	Note E - Stock-Based Compensation Stock Options: For the fiscal quarters ended September 27, 2020 and September 29, 2019, September 27, 2020 The following table summarizes the number of shares of the Company’s common stock subject to outstanding stock options: Three Months Ended September 27 , 2020 September 29 , 2019 Shares Shares Outstanding at beginning of year 206,750 216,550 Granted — — Exercised — — Forfeited/Canceled/Expired — — Outstanding at end of period 206,750 216,550 Exercisable at end of period 206,750 216,550 Restricted Stock Units: For the three months ended September 27, 2020 and September 29, 2019, the Company had no stock-based compensation expenses related to RSU’s. As of September 27, 2020, there was no unamortized stock-based compensation expense related to RSU’s.

Earnings per Share (EPS)

Earnings per Share (EPS)	3 Months Ended
	Sep. 27, 2020
Earnings per Share (EPS) [Abstract]
Earnings per Share (EPS)	Note F - Earnings per Share (EPS) The following table shows the reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation (in thousands, except per share amounts). Three Months Ended September 27 , 2020 September 29 , 2019 Net income available to common stockholders $ 76 $ 237 BASIC: Weighted average common shares 15,451 15,106 Net income per common share $ 0.00 $ 0.02 DILUTED: Weighted average common shares 15,451 15,106 Convertible notes 798 815 Dilutive stock options — 3 Weighted average common shares outstanding 16,249 15,924 Net income per common share $ 0.00 $ 0.01 For the three months ended September 27, 2020, options to purchase 206,750 shares of common stock at exercise prices from $2.71 to $13.11 were excluded from the computation of diluted EPS because their inclusion would have been anti-dilutive. For the three months ended September 29, 2019, options to purchase 206,750 shares of common stock at exercise prices ranging from $2.71 to $13.11 were excluded from the computation of diluted EPS because their inclusion would have been anti-dilutive.

Income Taxes

Income Taxes	3 Months Ended
	Sep. 27, 2020
Income Taxes [Abstract]
Income Taxes	Note G - Income Taxes For the three months ended September 27, 2020, the Company recorded income tax expense of $2 thousand, all of which was attributable to current state taxes. The Company utilized net operating loss carryforwards to offset federal taxes. The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. Future sources of taxable income are also considered in determining the amount of the recorded valuation allowance.

Segment Reporting

Segment Reporting	3 Months Ended
	Sep. 27, 2020
Segment Reporting [Abstract]
Segment Reporting	Note H - Segment Reporting The Company has three reportable operating segments as determined by management using the “management approach” as defined by the authoritative guidance on Disclosures about Segments of an Enterprise and Related Information: (1) Pizza Inn Franchising, (2) Pie Five Franchising and (3) Company-Owned Restaurants. These segments are a result of differences in the nature of the products and services sold. Corporate administration costs, which include, but are not limited to, general accounting, human resources, legal and credit and collections, are partially allocated to the three operating segments. Other revenue consists of non-recurring items. The Pizza Inn and Pie Five Franchising segments establish franchisees, licensees and territorial rights. Revenue for this segment is primarily derived from franchise royalties, franchise license fees, sale of area development and foreign master license rights, incentive payments from third party suppliers and distributors, advertising funds, and supplier convention funds. Assets for these segments include equipment, furniture and fixtures. The Company-Owned Restaurant segment includes sales and operating results for all Company-owned restaurants. Assets for this segment include equipment, furniture and fixtures for the Company-owned restaurants. Revenue for corporate administration and other consists of rental income and interest income. Assets primarily include cash and short-term investments, as well as furniture and fixtures located at the corporate office and trademarks and other intangible assets. All assets are located within the United States. Summarized in the following table are net sales and operating revenues, depreciation and amortization expense, and income before taxes, for the Company’s reportable segments as of the three months end ed September 27, 2020 and September 29, 2019 (in thousands): Three Months Ended September 27 , 2020 September 29 , 2019 Net sales and operating revenues: Pizza Inn Franchising $ 1,380 $ 1,864 Pie Five Franchising 476 852 Company-Owned Restaurants — 108 Corporate administration and other 47 52 Consolidated revenues $ 1,903 $ 2,876 Depreciation and amortization: Pizza Inn Franchising $ — $ — Pie Five Franchising — — Company-Owned Restaurants — — Combined — — Corporate administration and other 44 47 Depreciation and amortization $ 44 $ 47 Income before taxes: Pizza Inn Franchising $ 1,100 $ 1,412 Pie Five Franchising 209 438 Company-Owned Restaurants (100 ) (203 ) Combined 1,209 1,647 Corporate administration and other (1,131 ) (1,337 ) Income before taxes $ 78 $ 310 Geographic information (revenues): United States $ 1,859 $ 2,817 Foreign countries 44 59 Consolidated total $ 1,903 $ 2,876

Subsequent Events

Subsequent Events	3 Months Ended
	Sep. 27, 2020
Subsequent Events [Abstract]
Subsequent Events	Note I - Subsequent Events Subsequent to September 27, 2020, the Company has sold 2,539,682 shares of its common stock at an average sale price of $1.48 per share pursuant to a registered at-the-market offering. (See Note J to the Company’s Annual Report on Form 10-K for the fiscal year ended June 28, 2020.) The Company realized aggregate gross proceeds of $3.8 million from these at-the-market sales of common stock. Net proceeds from the transactions of $3.6 million are accretive to shareholders’ equity.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Sep. 27, 2020
Summary of Significant Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All appropriate intercompany balances and transactions have been eliminated.
Reclassification	Reclassification Certain prior year amounts have been reclassified to conform with current year presentation.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted cash of $0.2 million at September 27, 2020 and June 28, 2020 is omitted from cash and cash equivalents and is included in current assets. The restricted cash is held in an interest-bearing money market account and is restricted pursuant to a letter of credit for an insurance claim dating back to the mid-1980’s.
Fiscal Quarters	Fiscal Quarters The three month periods ended September 27, 2020 and September 29, 2019 each contained 13 weeks.
Use of Management Estimates	Use of Management Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Company’s management to make estimates and assumptions that affect its reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent liabilities. The Company bases its estimates on historical experience and other various assumptions that it believes are reasonable under the circumstances. Estimates and assumptions are reviewed periodically, and actual results could differ materially from estimates.
Revenue Recognition	Revenue Recognition Revenue is measured based on consideration specified in contracts with customers and excludes incentives and amounts collected on behalf of third parties, primarily sales tax. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. The following describes principal activities, separated by major product or service, from which the Company generates its revenues: Restaurant Sales Revenue from restaurant sales is recognized when food and beverage products are sold in Company-owned restaurants. The Company reports revenue net of sales taxes collected from customers and remitted to governmental taxing authorities. Franchise Revenues Franchise revenues consist of 1) franchise royalties, 2) supplier and distributor incentive revenues, 3) franchise license fees, 4) area development exclusivity fees and foreign master license fees, 5) advertising funds, and 6) supplier convention funds. Franchise royalties, which are based on a percentage of franchise restaurant sales, are recognized as sales occur. Supplier and distributor incentive revenues are recognized when title to the underlying commodities transfer. Franchise license fees are typically billed upon execution of the franchise agreement and amortized over the term of the franchise agreement which can range from five to 20 years. Fees received for renewal periods are amortized over the life of the renewal period. Area development exclusivity fees and foreign master license fees are typically billed upon execution of the area development and foreign master license agreements. Area development exclusivity fees are included in deferred revenue in the Condensed Consolidated Balance Sheets and allocated on a pro rata basis to all stores opened under that specific development agreement. Area development exclusivity fees that include rights to subfranchise are amortized as revenue over the term of the contract. Advertising fund contributions for Pie Five units represent contributions collected where we have control over the activities of the fund. Contributions are based on a percentage of net retail sales. The adoption of Topic 606 revised the determination of whether these arrangements are considered principal versus agent. For Pie Five, we have determined that we are the principal in these arrangements, and advertising fund contributions and expenditures are, therefore, reported on a gross basis in the Condensed Consolidated Statements of Income. In general, we expect such advertising fund contributions and expenditures to be largely offsetting and, therefore, do not expect a significant impact on our reported income before income taxes. Our obligation related to these funds is to develop and conduct advertising activities. Pie Five marketing fund contributions are billed and collected weekly. Supplier convention funds are deferred until the obligations of the agreement are met and the event takes place. Rental Income The Company also subleases some of its restaurant space to third parties. The Company’s two subleases have terms that end in 2023 and 2025. The sublease agreements are noncancelable through the end of the term and both parties have substantive rights to terminate the lease when the term is complete. Sublease agreements are not capitalized and are recorded as rental income in the period that rent is received. Total revenues consist of the following (in thousands): Three Months Ended September 27 , 2020 September 29 , 2019 Restaurant sales $ — $ 108 Franchise royalties 858 1,108 Supplier and distributor incentive revenues 767 1,023 Franchise license fees 102 211 Area development fees and foreign master license fees 4 7 Advertising funds 125 152 Supplier convention funds — 215 Rental income 48 41 Other (1 ) 11 $ 1,903 $ 2,876
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock options using the fair value recognition provisions of the authoritative guidance on share-based payments. The Company uses the Black-Scholes formula to estimate the value of stock-based compensation for options granted to employees and directors and expects to continue to use this acceptable option valuation model in the future. The authoritative guidance also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow. Compensation cost for restricted stock units (“RSU’s”) is measured as an amount equal to the fair value of the RSU’s on the date of grant and is expensed over the vesting period if achievement of the performance criteria is deemed probable, with the amount of the expense recognized based on the best estimate of the ultimate achievement level.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Sep. 27, 2020
Summary of Significant Accounting Policies [Abstract]
Total Revenues	Total revenues consist of the following (in thousands): Three Months Ended September 27 , 2020 September 29 , 2019 Restaurant sales $ — $ 108 Franchise royalties 858 1,108 Supplier and distributor incentive revenues 767 1,023 Franchise license fees 102 211 Area development fees and foreign master license fees 4 7 Advertising funds 125 152 Supplier convention funds — 215 Rental income 48 41 Other (1 ) 11 $ 1,903 $ 2,876

Adoption of ASC 842, "Leases" (

Adoption of ASC 842, "Leases" (Tables)	3 Months Ended
	Sep. 27, 2020
Adoption of ASC 842, "Leases" [Abstract]
Impact of Adoption of New Standards Update Related to Operating Lease	The impact of adoption of this new standards update was as follows (in thousands): July 1, 2019 Adoption Reclassification (1) Total Adjustment Operating lease right of use assets $ 3,428 $ 434 $ 3,862 Operating lease liabilities – current 528 528 Operating lease liabilities - long-term 3,347 3,347 (1) As of June 30, 2019, the Company had $132 thousand recorded within deferred rent for lease incentives incurred at the inception of the affected leases and $302 thousand in deferred rent tenant improvements. Upon adoption of the new standards update, these lease incentives were included within the lease liability.
Components of Total Lease Expense	The components of total lease expense for the three months ended September 27, 2020, the majority of which is included in general and administrative expense, are as follows (in thousands): Three Months Ended September 27, 2020 Operating lease cost $ 670 Sublease income (195 ) Total lease expense, net of sublease income $ 475
Supplemental Cash Flow Information Related to Operating Leases	Supplemental cash flow information related to operating leases is included in the table below (in thousands): Three Months Ended September 27, 2020 Cash paid for amounts included in the measurement of lease liabilities $ 193
Weighted Average Remaining Lease Term and Weighted Average Discount Rate	Weighted average remaining lease term and weighted average discount rate for operating leases are as follows: September 27, 2020 Weighted average remaining lease term 5.0 Years Weighted average discount rate 4.0 %
Maturities of Operating Lease Liabilities	Operating lease liabilities with enforceable contract terms that are greater than one year mature as follows (in thousands): Operating Leases Remainder of fiscal year 2021 $ 593 2022 804 2023 813 2024 766 Thereafter 1,448 Total operating lease payments $ 4,424 Less: imputed interest (473 ) Total operating lease liability $ 3,951

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Sep. 27, 2020
Stock-Based Compensation [Abstract]
Outstanding Stock Options	The following table summarizes the number of shares of the Company’s common stock subject to outstanding stock options: Three Months Ended September 27 , 2020 September 29 , 2019 Shares Shares Outstanding at beginning of year 206,750 216,550 Granted — — Exercised — — Forfeited/Canceled/Expired — — Outstanding at end of period 206,750 216,550 Exercisable at end of period 206,750 216,550

Earnings per Share (EPS) (Table

Earnings per Share (EPS) (Tables)	3 Months Ended
	Sep. 27, 2020
Earnings per Share (EPS) [Abstract]
Earnings per Share Basic and Diluted	The following table shows the reconciliation of the numerator and denominator of the basic EPS calculation to the numerator and denominator of the diluted EPS calculation (in thousands, except per share amounts). Three Months Ended September 27 , 2020 September 29 , 2019 Net income available to common stockholders $ 76 $ 237 BASIC: Weighted average common shares 15,451 15,106 Net income per common share $ 0.00 $ 0.02 DILUTED: Weighted average common shares 15,451 15,106 Convertible notes 798 815 Dilutive stock options — 3 Weighted average common shares outstanding 16,249 15,924 Net income per common share $ 0.00 $ 0.01

Segment Reporting (Tables)

Segment Reporting (Tables)	3 Months Ended
	Sep. 27, 2020
Segment Reporting [Abstract]
Segment Reporting Information	Summarized in the following table are net sales and operating revenues, depreciation and amortization expense, and income before taxes, for the Company’s reportable segments as of the three months end ed September 27, 2020 and September 29, 2019 (in thousands): Three Months Ended September 27 , 2020 September 29 , 2019 Net sales and operating revenues: Pizza Inn Franchising $ 1,380 $ 1,864 Pie Five Franchising 476 852 Company-Owned Restaurants — 108 Corporate administration and other 47 52 Consolidated revenues $ 1,903 $ 2,876 Depreciation and amortization: Pizza Inn Franchising $ — $ — Pie Five Franchising — — Company-Owned Restaurants — — Combined — — Corporate administration and other 44 47 Depreciation and amortization $ 44 $ 47 Income before taxes: Pizza Inn Franchising $ 1,100 $ 1,412 Pie Five Franchising 209 438 Company-Owned Restaurants (100 ) (203 ) Combined 1,209 1,647 Corporate administration and other (1,131 ) (1,337 ) Income before taxes $ 78 $ 310 Geographic information (revenues): United States $ 1,859 $ 2,817 Foreign countries 44 59 Consolidated total $ 1,903 $ 2,876

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019	Jun. 28, 2020
Cash and Cash Equivalents [Abstract]
Restricted cash	$ 234		$ 234
Revenues [Abstract]
Revenues	$ 1,903	$ 2,876
Minimum [Member]
Franchise Revenues [Abstract]
Amortization term of franchise license fees	5 years
Maximum [Member]
Franchise Revenues [Abstract]
Amortization term of franchise license fees	20 years
Restaurant Sales [Member]
Revenues [Abstract]
Revenues	$ 0	108
Franchise Royalties [Member]
Revenues [Abstract]
Revenues	858	1,108
Supplier and Distributor Incentive Revenues [Member]
Revenues [Abstract]
Revenues	767	1,023
Franchise License Fees [Member]
Revenues [Abstract]
Revenues	102	211
Area Development Fees and Foreign Master License Fees [Member]
Revenues [Abstract]
Revenues	4	7
Advertising Funds [Member]
Revenues [Abstract]
Revenues	125	152
Supplier Convention Funds [Member]
Revenues [Abstract]
Revenues	0	215
Rental Income [Member]
Revenues [Abstract]
Revenues	48	41
Other [Member]
Revenues [Abstract]
Revenues	$ (1)	$ 11

Adoption of ASC 842, "Leases"_2

Adoption of ASC 842, "Leases" (Details) $ in Thousands		3 Months Ended
		Sep. 27, 2020USD ($)Lease	Jun. 28, 2020USD ($)	Jun. 30, 2019USD ($)
Adoption of ASC 842, "Leases" [Abstract]
Percentage of change to total assets under operating leases				30.00%
Percentage of change to total liabilities under operating leases				64.00%
Balance Sheet [Abstract]
Operating lease right of use asset, net		$ 3,421	$ 3,567
Operating lease liabilities - current		644	632
Operating lease liabilities - long-term		$ 3,307	$ 3,471
Deferred rent recorded for lease incentives				$ 132
Deferred rent tenant improvements				302
Operating Lease, Description [Abstract]
Number of subleases | Lease		2
Components of Total Lease Expense [Abstract]
Operating lease cost		$ 670
Sublease income		(195)
Total lease expense, net of sublease income		475
Supplemental Cash Flow Information Related to Operating Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities		$ 193
Weighted Average Remaining Lease Term and Discount Rate [Abstract]
Weighted average remaining lease term		5 years
Weighted average discount rate		4.00%
Maturities of Operating Lease Liabilities [Abstract]
Remainder of fiscal year 2021		$ 593
2022		804
2023		813
2024		766
Thereafter		1,448
Total operating lease payments		4,424
Less imputed interest		(473)
Total operating lease liability		$ 3,951
Information Technology Equipment [Member] | Minimum [Member]
Operating Lease, Description [Abstract]
Term of contract		1 year
Information Technology Equipment [Member] | Maximum [Member]
Operating Lease, Description [Abstract]
Term of contract		5 years
Office Agreements [Member] | Minimum [Member]
Operating Lease, Description [Abstract]
Term of contract		1 year
Office Agreements [Member] | Maximum [Member]
Operating Lease, Description [Abstract]
Term of contract		10 years
Restaurant Space Agreements [Member] | Minimum [Member]
Operating Lease, Description [Abstract]
Term of contract		1 year
Restaurant Space Agreements [Member] | Maximum [Member]
Operating Lease, Description [Abstract]
Term of contract		10 years
ASU 2016-02 [Member]
Balance Sheet [Abstract]
Operating lease right of use asset, net				3,862
Operating lease liabilities - current				528
Operating lease liabilities - long-term				3,347
ASU 2016-02 [Member] | Adoption [Member]
Balance Sheet [Abstract]
Operating lease right of use asset, net				3,428
Operating lease liabilities - current				528
Operating lease liabilities - long-term				3,347
ASU 2016-02 [Member] | Reclassification [Member]
Balance Sheet [Abstract]
Operating lease right of use asset, net	[1]			$ 434
[1]	As of June 30, 2019, the Company had $132 thousand recorded within deferred rent for lease incentives incurred at the inception of the affected leases and $302 thousand in deferred rent tenant improvements. Upon adoption of the new standards update, these lease incentives were included within the lease liability.

Stock Purchase Plan (Details)

Stock Purchase Plan (Details) - shares	Apr. 22, 2009	Jun. 02, 2008	Sep. 27, 2020	Sep. 29, 2019	May 23, 2007
Treasury Stock, Shares [Abstract]
Repurchase of shares common stock (in shares)			0	0
2007 Stock Purchase Plan [Member]
Treasury Stock, Shares [Abstract]
Number of common stock shares authorized to purchase (in shares)					1,016,000
Amended 2007 Stock Purchase Plan [Member]
Treasury Stock, Shares [Abstract]
Number of common stock shares authorized to purchase (in shares)	3,016,000	2,016,000
Repurchase of shares common stock (in shares)	1,000,000	1,000,000

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Stock Options [Member]
Summary of Shares of Common Stock Subject to Outstanding Stock Options [Roll Forward]
Outstanding at beginning of year (in shares)	206,750	216,550
Granted (in shares)	0	0
Exercised (in shares)	0	0
Forfeited/Canceled/Expired (in shares)	0	0
Outstanding at end of period (in shares)	206,750	216,550
Exercisable at end of Period (in shares)	206,750	216,550
Stock-based compensation expense recognized	$ 0	$ 0
Unamortized stock-based compensation expense	0
Restricted Stock Units [Member]
Summary of Shares of Common Stock Subject to Outstanding Stock Options [Roll Forward]
Stock-based compensation expense recognized	0	$ 0
Unamortized stock-based compensation expense	$ 0

Earnings per Share (EPS) (Detai

Earnings per Share (EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
Earnings Per Share [Abstract]
Net income available to common stockholders	$ 76	$ 237
BASIC [Abstract]
Weighted average common shares (in shares)	15,451,000	15,106,000
Net income per common share (in dollars per share)	$ 0	$ 0.02
DILUTED [Abstract]
Weighted average common shares (in shares)	15,451,000	15,106,000
Convertible notes (in shares)	798,000	815,000
Dilutive stock options (in shares)	0	3,000
Weighted average common shares outstanding (in shares)	16,249,000	15,924,000
Net income per common share (in dollars per share)	$ 0	$ 0.01
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings per Share [Abstract]
Options to purchase shares of common stock excluded from computation of diluted EPS (in shares)	206,750	206,750
Stock Options [Member] | Minimum [Member]
Antidilutive Securities Excluded from Computation of Earnings per Share [Abstract]
Options to purchase shares of common stock exercise price (in dollars per share)	$ 2.71	$ 2.71
Stock Options [Member] | Maximum [Member]
Antidilutive Securities Excluded from Computation of Earnings per Share [Abstract]
Options to purchase shares of common stock exercise price (in dollars per share)	$ 13.11	$ 13.11

Income Taxes (Details)

Income Taxes (Details) $ in Thousands	3 Months Ended
	Sep. 27, 2020USD ($)
Income Taxes [Abstract]
Current state tax expense	$ 2
Valuation allowance on deferred tax assets	$ 6,500

Segment Reporting (Details)

Segment Reporting (Details) $ in Thousands	3 Months Ended
	Sep. 27, 2020USD ($)Segment	Sep. 29, 2019USD ($)
Segment Reporting [Abstract]
Number of reportable segments | Segment	3
Segment Reporting Information, Profit (Loss) [Abstract]
Consolidated revenues	$ 1,903	$ 2,876
Depreciation and amortization	44	47
Income before taxes	78	310
Operating Segments [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Depreciation and amortization	0	0
Income before taxes	1,209	1,647
Corporate Administration and Other [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Consolidated revenues	47	52
Depreciation and amortization	44	47
Income before taxes	(1,131)	(1,337)
Reportable Geographical Components [Member] | United States [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Consolidated revenues	1,859	2,817
Reportable Geographical Components [Member] | Foreign Countries [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Consolidated revenues	44	59
Pizza Inn Franchising [Member] | Operating Segments [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Consolidated revenues	1,380	1,864
Depreciation and amortization	0	0
Income before taxes	1,100	1,412
Pie Five Franchising [Member] | Operating Segments [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Consolidated revenues	476	852
Depreciation and amortization	0	0
Income before taxes	209	438
Company-Owned Restaurants [Member] | Operating Segments [Member]
Segment Reporting Information, Profit (Loss) [Abstract]
Consolidated revenues	0	108
Depreciation and amortization	0	0
Income before taxes	$ (100)	$ (203)

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Event [Member] - At-The-Market Offering [Member] $ / shares in Units, $ in Millions	2 Months Ended
	Nov. 12, 2020USD ($)$ / sharesshares
Sale of Stock [Abstract]
Sale of common stock (in shares) | shares	2,539,682
Average sale price of common stock (in dollars per share) | $ / shares	$ 1.48
Proceeds from sale of common stock	$ 3.8
Net proceeds from transactions cumulative to shareholders equity	$ 3.6