Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 25, 2018 | Dec. 06, 2018 | Mar. 26, 2018 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 25, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | GTIM | ||
Entity Registrant Name | Good Times Restaurants Inc. | ||
Entity Central Index Key | 825,324 | ||
Current Fiscal Year End Date | --09-25 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 12,522,778 | ||
Entity Public Float | $ 37,577,171 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 25, 2018 | Sep. 26, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 3,477 | $ 4,337 |
Receivables | 1,735 | 573 |
Prepaid expenses and other | 151 | 296 |
Inventories | 1,004 | 847 |
Notes receivable | 14 | 13 |
Total current assets | 6,381 | 6,066 |
PROPERTY AND EQUIPMENT | ||
Land and building | 5,002 | 5,001 |
Leasehold improvements | 27,844 | 21,159 |
Fixtures and equipment | 24,948 | 20,945 |
Property, Plant and Equipment, Gross, Total | 57,794 | 47,105 |
Less accumulated depreciation and amortization | (22,549) | (18,636) |
Total net property and equipment | 35,245 | 28,469 |
Assets held for sale | 1,221 | |
OTHER ASSETS: | ||
Notes receivable, net of current portion | 32 | 46 |
Deposits and other assets | 207 | 240 |
Trademarks | 3,900 | 3,900 |
Other intangibles, net | 35 | 61 |
Goodwill | 15,150 | 15,150 |
Other Assets, Noncurrent, Total | 19,324 | 19,397 |
TOTAL ASSETS | 60,950 | 55,153 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt and capital lease obligations | 17 | 17 |
Accounts payable | 3,774 | 3,311 |
Deferred income | 92 | 41 |
Other accrued liabilities | 4,452 | 3,547 |
Total current liabilities | 8,335 | 6,916 |
LONG-TERM LIABILITIES: | ||
Maturities of long-term debt and capital lease obligations due after one year | 7,472 | 5,339 |
Deferred and other liabilities | 7,922 | 5,614 |
Total long-term liabilities | 15,394 | 10,953 |
COMMITMENTS AND CONTINGENCIES (Note 5) | ||
Good Times Restaurants Inc stockholders' equity: | ||
Preferred stock, $.01 par value; 5,000,000 shares authorized, 0 shares issued and outstanding, and outstanding as of Sept. 25, 2018 and Sept. 26, 2017, respectively | ||
Common stock, $.001 par value; 50,000,000 shares authorized 12,481,162 and 12,427,280 shares issued and outstanding as of September 25, 2018 and September 26, 2017, respectively | 12 | 12 |
Capital contributed in excess of par value | 59,385 | 58,939 |
Accumulated deficit | (25,414) | (24,380) |
Total Good Times Restaurants Inc. stockholders' equity | 33,983 | 34,571 |
Non-controlling interests | 3,238 | 2,713 |
Total stockholders' equity | 37,221 | 37,284 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 60,950 | $ 55,153 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 25, 2018 | Sep. 26, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 12,481,162 | 12,427,280 |
Common stock, shares outstanding | 12,481,162 | 12,427,280 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
NET REVENUES: | ||
Total net revenues | $ 99,240 | $ 79,080 |
RESTAURANT OPERATING COSTS: | ||
Food and packaging costs | 30,256 | 24,900 |
Payroll and other employee benefit costs | 35,653 | 28,274 |
Restaurant occupancy costs | 7,261 | 5,759 |
Other restaurant operating costs | 9,283 | 7,084 |
Preopening costs | 2,784 | 2,588 |
Depreciation and amortization | 3,705 | 2,897 |
Total restaurant operating costs | 88,942 | 71,502 |
General and administrative costs | 7,857 | 7,002 |
Advertising costs | 1,991 | 1,694 |
Franchise costs | 41 | 108 |
Asset impairment costs | 72 | 219 |
Gain on restaurant asset sale | (35) | (23) |
INCOME (LOSS) FROM OPERATIONS | 372 | (1,422) |
OTHER INCOME (EXPENSES): | ||
Interest income | 4 | 9 |
Interest expense | (392) | (191) |
Other expense | (1) | (1) |
Total other expenses, net | (389) | (183) |
NET LOSS | (17) | (1,605) |
Income attributable to non-controlling interests | (1,017) | (650) |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (1,034) | $ (2,255) |
BASIC AND DILUTED LOSS PER SHARE: | ||
Net loss attributable to common shareholders | $ (0.08) | $ (0.18) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
Basic and Diluted | 12,463,760 | 12,320,909 |
Restaurant sales [Member] | ||
NET REVENUES: | ||
Total net revenues | $ 98,564 | $ 78,395 |
Franchise royalties [Member] | ||
NET REVENUES: | ||
Total net revenues | $ 676 | $ 685 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Capital Contributed in Excess of Par Value [Member] | Non-Controlling Interest In Partnerships [Member] | Accumulated Deficit [Member] | Total |
BALANCES at Sep. 27, 2016 | $ 12 | $ 58,191 | $ 1,720 | $ (22,125) | $ 37,798 | |
BALANCES, shares at Sep. 27, 2016 | 12,282,625 | |||||
Stock based compensation cost | 748 | 748 | ||||
Restricted stock grant vesting | 144,655 | |||||
Stock option exercise | ||||||
Stock option exercise, shares | ||||||
Non-controlling interests: | ||||||
Income | 650 | $ 650 | ||||
Contributions | 1,421 | 1,421 | ||||
Distributions | (1,043) | (1,043) | ||||
Acquired through acquisition | (35) | (35) | ||||
Net Loss attributable to Good Times Restaurants Inc. and comprehensive loss | (2,255) | (2,255) | ||||
BALANCES at Sep. 26, 2017 | $ 12 | 58,939 | 2,713 | (24,380) | 37,284 | |
BALANCES, shares at Sep. 26, 2017 | 12,427,280 | |||||
Stock based compensation cost | 417 | 417 | ||||
Restricted stock grant vesting | 44,485 | |||||
Stock option exercise | 29 | $ 29 | ||||
Stock option exercise, shares | 9,397 | 9,397 | ||||
Non-controlling interests: | ||||||
Income | 1,017 | $ 1,017 | ||||
Contributions | 933 | 933 | ||||
Distributions | (1,425) | (1,425) | ||||
Net Loss attributable to Good Times Restaurants Inc. and comprehensive loss | (1,034) | (1,034) | ||||
BALANCES at Sep. 25, 2018 | $ 12 | $ 59,385 | $ 3,238 | $ (25,414) | $ 37,221 | |
BALANCES, shares at Sep. 25, 2018 | 12,481,162 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (17) | $ (1,605) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 3,951 | 3,101 |
Accretion of deferred rent | 653 | 636 |
Amortization of lease incentive obligation | (431) | (314) |
Gain on disposal of assets | (35) | (23) |
Asset impairment costs | 72 | 219 |
Stock based compensation expense | 417 | 748 |
(Increase) decrease in: | ||
Other receivables | (1,161) | (148) |
Inventories | (157) | (216) |
Deposits and other assets | 111 | 35 |
(Decrease) increase in: | ||
Accounts payable | 194 | 777 |
Deferred liabilities | 1,932 | 1,413 |
Accrued and other liabilities | 975 | 360 |
Net cash provided by operating activities | 6,504 | 4,983 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Payments for the purchase of property and equipment | (10,444) | (14,513) |
Proceeds from sale leaseback transactions | 1,397 | 1,927 |
Payment to repurchase non-controlling interest | (54) | |
Payments received on loans to franchisees and to others | 13 | 12 |
Net cash used in investing activities | (9,034) | (12,628) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Principal payments on notes payable, capital leases, and long-term debt | (1,617) | (26) |
Borrowings on notes payable and long-term debt | 3,750 | 5,300 |
Proceeds from stock option exercises | 29 | 0 |
Contributions from non-controlling interests | 933 | 1,421 |
Distributions to non-controlling interests | (1,425) | (1,043) |
Net cash provided by financing activities | 1,670 | 5,652 |
DECREASE IN CASH AND CASH EQUIVALENTS | (860) | (1,993) |
CASH AND CASH EQUIVALENTS, beginning of year | 4,337 | 6,330 |
CASH AND CASH EQUIVALENTS, end of year | 3,477 | 4,337 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 320 | 115 |
Non-cash additions of property and equipment | $ 269 | $ 660 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 25, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies: Organization Drive Thru commenced operations in 1986 and as of September 25, 2018, operates nineteen Company-owned and seven joint venture drive-thru fast food hamburger restaurants under the name Good Times Burgers & Frozen Custard. Drive Thru’s restaurants are located in Colorado. In addition, Drive Thru has nine franchises, with seven operating in Colorado and two in Wyoming. BD of Colo commenced operations in 2013 and as of September 25, 2018, operates thirteen Company-owned full-service upscale casual dining restaurants under the name Bad Daddy’s Burger Bar, twelve of which are located in Colorado and one located in Norman, Oklahoma. BDI and BDFD were acquired on May 7, 2015. As of September 25, 2018, BDI operates ten Company-owned and eight joint venture full-service upscale casual dining restaurants, also under the name Bad Daddy’s Burger Bar, thirteen of which are located in North Carolina, three are located in Georgia, and one each are located in Tennessee and South Carolina. BDFD has one franchise operating in South Carolina. We follow accounting standards set by the Financial Accounting Standards Board, commonly referred to as the “FASB”. The FASB sets generally accepted accounting principles (GAAP) that we follow to ensure we consistently report our financial condition, results of operations, and cash flows. Fiscal Year Fiscal year 2018 began September 27, 2017 and ended September 25, 2018; fiscal year 2017 began September 28, 2016 and ended September 26, 2017. Principles of Consolidation Advertising Costs Accounting Estimates Cash and Cash Equivalents Accounts Receivable Inventories Property and Equipment Assets are classified as held for sale if they meet the criteria outlined in ASC 360, Property, Plant and Equipment Maintenance and repairs are charged to expense as incurred, and expenditures for major improvements are capitalized. When assets are retired, or otherwise disposed of, the property accounts are relieved of costs and accumulated depreciation with any resulting gain or loss credited or charged to income. Trademarks Goodwill Impairment of Long-Lived Assets On January 30, 2018 the Company closed one Good Times restaurant in Aurora, Colorado. A non-cash impairment charge of $219,000 related to this restaurant was previously taken in the fiscal year ended September 26, 2017 and no additional loss from disposal of these assets has been recognized in the current year, nor is any additional loss expected. The Company is currently marketing the property and intends to sublease the property to a suitable tenant over the approximate 17-year remaining term of the lease. The Company expects to be able to sublease this property at or above its contractual lease rate but does not expect such sublease commencement until fiscal 2019. As such, we recorded non-cash rent of approximately $48,000 reflecting the expected fair value of future lease costs, net of sublease income, associated with the closing of this restaurant. Given the results of our analysis at March 27, 2018, we identified one restaurant where the expected future cash flows would not be sufficient to recover the carrying value of the associated assets. This restaurant, an additional Good Times restaurant in Aurora, Colorado, was closed on April 22, 2018. We recorded a non-cash charge of $72,000 related to the impairment of this restaurant during the quarter ending March 27, 2018. No additional loss from disposal of assets is expected associated with this property. Prior to its closure, on April 6, 2018, the Company entered into a sublease of this property, the terms of which will provide sublease income substantially equal to the lease costs over the approximate five remaining years of the lease. Sales of Restaurants and Restaurant Equity Interests The Company accounts for the sale of restaurants when the risks and other incidents of ownership have been transferred to the buyer. Specifically, a) no continuing involvement by the Company exists in restaurants that are sold, b) sales contracts and related income recognition are not dependent on the future successful operations of the sold restaurants, and c) the Company is not involved as a guarantor on the purchasers’ debts. Deferred Liabilities Lease incentives are recorded as a deferred liability when received and subsequently credited to rent expense on a straight-line basis over the life of the lease. The balance of the lease incentive obligations at September 25, 2018 was $5,309,000 and is reflected in the accompanying consolidated balance sheet as a deferred liability. Also included in the $7,922,000 deferred and other liabilities balance are other long-term liabilities of $8,000 and a $351,000 deferred gain on the sale of the building and improvements of two Company-owned Good Times restaurants in sale leaseback transactions. The building and improvements were subsequently leased back from the third-party purchaser. The gain will be recognized in future periods in proportion to the rents paid on the twenty-year lease. Revenue Recognition Restaurant Sales: Revenue from Company restaurant sales is recognized when the food and beverage products are sold and are presented net of sales taxes. Franchise and Area Development Fees: Individual franchise fee revenue is deferred when received and is recognized as income when the Company has substantially performed all of its obligations under the franchise agreement and the franchisee has commenced operations. The Company’s commitments and obligations pursuant to the franchise agreements consist of a) development assistance; including site selection, building specifications and equipment purchasing, and b) operating assistance; including training of personnel and preparation and distribution of manuals and operating materials. All of these obligations are effectively complete upon the opening of the restaurant at which time the franchise fee and the portion of any development fee allocable to that restaurant is recognized. There are no additional material commitments or obligations. The Company has not recognized any franchise fees that have not been collected. The Company segregates initial franchise fees from other franchise revenue in the statement of operations. Revenues and costs related to Company-owned restaurants are segregated from revenues and costs related to franchised restaurants in the statement of operations. Continuing royalties from franchisees, which are a percentage of the gross sales of franchised operations, are recognized as income when earned. Franchise development expenses, which consist primarily of legal costs and restaurant opening expenses associated with developing and opening franchise restaurants, are expensed against the related franchise fee income. Preopening Costs Income Taxes The Company is subject to U.S. federal income tax and income tax in multiple U.S state jurisdictions. The Company continues to remain subject to examination by federal authorities and state jurisdictions generally for fiscal years after 2014. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company's financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. No accrual for interest and penalties was considered necessary as of September 25, 2018. Net Income (Loss) Per Common Share Financial Instruments and Concentrations of Credit Risk Financial instruments potentially subjecting the Company to concentrations of credit risk consist principally of receivables. At September 25, 2018 notes receivable totaled $46,000 and is due from three entities. Additionally, the Company has other current receivables totaling $1,735,000, which includes $84,000 of franchise receivables, $1,014,000 related to lease incentives, $355,000 due from non-controlling interest members, and $282,000 for miscellaneous receivables which are all due in the normal course of business. The Company believes it will collect fully on all notes and receivables. The Company purchases most of its restaurant food and paper from two vendors. The Company believes a sufficient number of other suppliers exist from which food and paper could be purchased to prevent any long-term, adverse consequences. The Company operates in two industry segments, quick service restaurants and casual dining restaurants. A geographic concentration exists because the Company’s customers are generally located in Colorado and the Southeast region of the U.S., most significantly in North Carolina. Stock-Based Compensation Variable Interest Entities Fair Value of Financial Instruments The following three levels of inputs may be used to measure fair value and require that the assets or liabilities carried at fair value are disclosed by the input level under which they were valued. Level 1: Quoted market prices in active markets for identical assets and liabilities. Level 2: Observable inputs other than defined in Level 1, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are not corroborated by observable market data. Non-controlling Interests Our non-controlling interests consist of one joint venture partnership involving Good Times restaurants and eight joint venture partnerships involving eight Bad Daddy’s restaurants, including three Bad Daddy’s restaurants opened during fiscal 2018. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09 , “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment,” In August 2018, the FASB issued ASU No. 2018-16 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 25, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 2. Goodwill and Intangible Assets: The following table presents goodwill and intangible assets as of September 25, 2018 and September 26, 2017 (in thousands): September 25, 2018 September 26, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to Franchise rights 116 (81 ) 35 116 (58 ) 58 Non-compete agreements 15 (15 ) - 15 (12 ) 3 $ 131 $ (96 ) $ 35 $ 131 $ (70 ) $ 61 Indefinite-lived intangible Trademarks $ 3,900 $ - $ 3,900 $ 3,900 $ - $ 3,900 Intangible assets, net $ 4,031 $ (96 ) $ 3,935 $ 4,031 $ (70 ) $ 3,961 Goodwill $ 15,150 $ - $ 15,150 $ 15,150 $ - $ 15,150 The Company had no goodwill impairment losses in the periods presented in the above table. There were no impairments to intangible assets during the fiscal years ended September 25, 2018 and September 26, 2017. The aggregate amortization expense related to intangible assets subject to amortization was $25,000 and $28,000 in each of the fiscal years ended September 25, 2018 and September 26, 2017, respectively. The estimated aggregate future amortization expense as of September 25, 2018 is as follows (in thousands): 2019 $ 23 2020 12 $ 35 |
Debt and Capital Leases
Debt and Capital Leases | 12 Months Ended |
Sep. 25, 2018 | |
Debt and Capital Lease Obligations [Abstract] | |
Debt and Capital Leases | 3. Debt and Capital Leases : 2018 2017 Cadence Bank credit facility 7,450 5,300 Notes payable with Ally Financial with payments of principal and interest 39 56 7,489 5,356 Less current portion (17 ) (17 ) Long term portion $ 7,472 $ 5,339 Cadence Credit Facility On September 8, 2016, the Company entered into a credit agreement with Cadence Bank (“Cadence”) pursuant to which Cadence agreed to loan the Company up to $9,000,000 (the “Cadence Credit Facility”). On September 11, 2017, the Cadence Credit Facility was amended to increase the loan maximum to $12,000,000 and extend the maturity date to December 31, 2020 (the “2017 Amendment”). As of September 25, 2018, the Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%. All borrowings under the Cadence Credit Facility bear interest at a variable rate based upon the Company’s election of (i) 3.0% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.125% floor, plus 4.0%. Interest is due at the end of each calendar quarter if the Company selects to pay interest based on the base rate and at the end of each LIBOR period if it selects to pay interest based on LIBOR. As of September 25, 2018, the weighted average interest rate applicable to borrowings under the Cadence Credit Facility was 6.1229%. The Cadence Credit Facility contains certain affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, which as of September 25, 2018 include covenants setting a maximum leverage ratio of 5.35:1, a minimum fixed charge coverage ratio of 1.25:1, and minimum liquidity of $2,500,000. As of September 25, 2018, the Company was in compliance with the covenants under the Cadence Credit Facility. As a result of entering into the Cadence Credit Facility and the 2017 Amendment, the Company paid loan origination costs including professional fees of approximately $197,000 and is amortizing these costs over the term of the credit agreement. The obligations under the Cadence Credit Facility are collateralized by a first-priority lien on substantially all of the Company’s assets. As of September 25, 2018, the outstanding balance on borrowings against the facility was $7,450,000. Availability of the Cadence Credit Facility for borrowings is reduced by the outstanding face value of any letters of credit issued under the facility. As of September 25, 2018, the outstanding face value of such letters of credit was $157,500. As of September 25, 2018, principal payments on debt become due as follows: Periods Ending September, 2019 17 2020 11 2021 7,460 2022 1 $ 7,489 As disclosed in Note 10 to these financial statements, the Cadence Credit Facility was amended subsequent to the end of fiscal 2018. This amendment extended the Cadence Credit Facility’s maturity, which resulted in the principal payments associated with it being due during fiscal 2022 rather than during fiscal 2021 as reflected above. Total interest expense on notes payable and capital leases was $392,000 and $191,000 for fiscal 2018 and fiscal 2017, respectively. |
Other Accrued Liabilities
Other Accrued Liabilities | 12 Months Ended |
Sep. 25, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Other Accrued Liabilities | 4. Other Accrued Liabilities : Other accrued liabilities consist of the following: September 25, September 26, Wages and other employee benefits $ 2,075 $ 1,551 Taxes, other than income tax 1,516 1,394 Other 861 602 Total $ 4,452 $ 3,547 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 25, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies : As of September 25, 2018, the Company had total commitments outstanding of $451,000 related to construction contracts for Bad Daddy’s restaurants currently under development. We anticipate these commitments will be funded out of existing cash or future borrowings against the Cadence Bank credit facility. The Company’s office space and the land and buildings related to the Drive Thru and Bad Daddy’s restaurant facilities are classified as operating leases and expire over the next 19 years. Some leases contain escalation clauses over the lives of the leases. Most of the leases contain one to three five-year renewal options at the end of the initial term. Certain leases include provisions for additional contingent rent payments if sales volumes exceed specified levels. The Company paid $83,000 and $55,000 in contingent rentals for fiscal 2018 and fiscal 2017, respectively. Following is a summary of operating lease activity for the fiscal years ended September 25, 2018 and September 26, 2017: 2018 2017 Minimum rentals $ 5,972 $ 4,755 Less sublease rentals (404 ) (388 ) Net rent paid $ 5,568 $ 4,367 As of September 25, 2018, future minimum rental commitments required under the Company’s operating leases that have initial or remaining non-cancellable lease terms in excess of one year are as follows: Years Ending September 2019 $ 6,707 2020 6,194 2021 5,721 2022 5,587 2023 5,242 Thereafter 19,936 49,387 Less sublease rentals (1,124 ) $ 48,263 The Company is contingently liable on the sublease rentals disclosed above. The subleased and assigned leases expire between 2019 and 2024. In the past the Company has never been required to pay any significant amount in connection with its guarantees. Currently we have not been notified nor are we aware of any leases in default by the franchisees; however, there can be no assurance that there will not be such defaults in the future which could have a material effect on our future operating results. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 25, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes : Deferred tax assets (liabilities) are comprised of the following at the period end: 2018 2017 Current Long-Term Current Long-Term Deferred assets (liabilities): Tax effect of net operating loss carry-forward $ - $ 3,605 $ - $ 4,084 General business credits - 2,264 - 1,378 Partnership/joint venture basis differences - (63 ) - (126 ) Deferred revenue - 111 - 75 Property and equipment basis differences - (1,444 ) - (859 ) Intangibles basis differences - (803 ) - (705 ) Other accrued liability and asset difference 128 1,055 117 1,454 Net deferred tax assets 128 4,725 117 5,301 Less valuation allowance* (128 ) (4,725 ) (117 ) (5,301 ) Net deferred tax assets $ - $ - $ - $ - * The valuation allowance decreased by $565,000 during the year ended September 25, 2018. The Company has net operating loss carry-forwards available for future periods, as discussed below, of approximately $4,129,000 from 2018, $2,601,000 from 2017, and $9,249,000 from 2016 and prior for income tax purposes. The net operating loss carry-forwards from periods prior to 2018 expire between 2025 and 2037. Based on the change in control, which occurred in 2011, the utilization of the loss carry-forwards incurred for periods prior to 2012 is limited to approximately $160,000 per year. The Company has general business tax credits of $2,264,000 from 2015 through 2018 which expire from 2034 through 2038. 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. The Company assessed whether a valuation allowance should be recorded against its deferred tax assets based on consideration of all available evidence using a “more likely than not” standard. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Future sources of taxable income were also considered in determining the amount of the recorded valuation allowance. Based on the Company’s review of this evidence, management determined that a full valuation allowance against all of the Company’s deferred tax assets was appropriate. Total income tax expense for the years ended September 25, 2018 and September 26, 2017 differed from the amounts computed by applying the U.S. Federal statutory tax rates to pre-tax income as follows: 2018 2017 Total benefit computed by applying statutory federal rate $ (299 ) $ (789 ) State income tax, net of federal tax benefit (41 ) (68 ) FICA/WOTC tax credits (612 ) (432 ) Tax Reform Impact 1,305 0 Effect of change in valuation allowance (565 ) 1,194 Permanent differences 78 119 Other 134 (24 ) Provision for income taxes $ 0 $ 0 On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law, significantly impacting several sections of the Internal Revenue Code. The enactment date occurred prior to the end of the second quarter of fiscal 2018 and therefore the federal statutory tax rate changes stipulated by the TCJA were reflected in the second quarter. Effective January 1, 2018, the U.S. corporate federal statutory income tax rate was reduced from 35% to 21%. The Company’s statutory federal income tax rate is 28.1% for fiscal year 2018 representing a blended tax rate for the current fiscal year based on the number of days in the fiscal year before and after the effective date. For the fiscal year ended September 26, 2017, the Company’s statutory federal tax rate was 35.0% and will be 21.0% for fiscal year 2019 and thereafter. The Company remeasured its existing deferred tax assets and liabilities at the rate the Company expected to be in effect when those deferred taxes would be realized. The Company has assessed a full valuation allowance against the deferred taxes, and therefore applied the 21% tax rate applicable to fiscal years 2019 and beyond. The impact of this remeasurement was tax expense of $1.3 million, exclusive of the assessment of a valuation allowance. In December 2017, the Securities and Exchange Commission provided guidance allowing registrants to record provisional amounts, during a specified measurement period, when the necessary information is not available, prepared, or analyzed in reasonable detail to account for the impact of the TCJA. Due to the continued determination that a full valuation allowance was appropriate to the Company’s deferred tax assets and liabilities, these changes were offset by equal and offsetting change in the valuation allowance. As of September 25, 2018, we have completed our analysis of the revaluation of our deferred tax assets and liabilities, the discrete impact of such as identified above. We continue to assess the impacts of the TCJA on future fiscal years and monitor the Internal Revenue Service guidance intended to interpret the most complex provisions of the TCJA. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Sep. 25, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity : Preferred Stock The Company has the authority to issue 5,000,000 shares of preferred stock. The Board of Directors has the authority to issue such preferred shares in series and determine the rights and preferences of the shares as may be determined by the Board of Directors. Common Stock The Company has the authority to issue 50,000,000 shares of common stock, par value $.001, as of September 25, 2018 there were 12,481,162 shares outstanding. Stock Plans The Company has an Omnibus Equity Incentive Compensation Plan (the “2008 Plan”), approved by shareholders in fiscal 2008, which is the successor equity compensation plan to the Company’s 2001 Stock Option Plan (the “2001 Plan”). Pursuant to stockholder approval in September 2012, February 2014 and February 2016 the total number of shares available for issuance under the 2008 Plan was increased to 1,500,000. The 2008 Plan expired in 2018 and the Company established a new plan, the 2018 Omnibus Equity Incentive Plan (the “2018 Plan”), during the third fiscal quarter of 2018, pursuant to shareholder approval. Under the 2018 Plan, the total number of shares available for issuance was set at 750,000 shares. As of September 25, 2018, 499,605 shares were available for future grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and stock-based awards. The 2018 Plan serves as the successor to our 2008 Plan, as amended (the “Predecessor Plan”), and no further awards shall be made under the Predecessor Plan from and after the effective date of the 2018 Plan. All outstanding awards under the Predecessor Plan continue to be governed by the Predecessor Plan, each such award shall continue to be governed solely by the terms and conditions of the instrument evidencing such grant or issuance, and, except as otherwise expressly provided in the 2018 Plan or by the Committee that administers the 2008 and 2018 Plans, no provision of either Plan shall affect or otherwise modify the rights or obligations of holders of such incorporated awards. Stock-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the grant). The Company recognizes the impact of forfeitures as forfeitures occur. The Company recorded $417,000 and $748,000 in total stock option and restricted stock compensation expense during fiscal years 2018 and 2017, respectively, that was classified as general and administrative costs. Stock Option Awards The Company measures the compensation cost associated with stock option awards by estimating the fair value of the award as of the grant date using the Black-Scholes pricing model. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the Company’s stock options and stock awards granted during fiscal 2018 and fiscal 2017. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by the employees who receive equity awards. During the fiscal year ended September 25, 2018, the Company granted a total of 18,274 incentive stock options, from available shares under its 2008 Plan, as amended, with exercise prices between $2.70 and $2.73 and per-share weighted average fair values between $1.65 and $1.95. Additionally, during the fiscal year ended September 25, 2018, the Company granted a total of 129,381 incentive and non-statutory stock options, from available shares under its 2018 Plan, with an exercise prices between $3.55 and $4.25 and a per-share weighted average fair value between $2.08 and $2.52. Subsequent to receiving stockholder approval, the Company completed a value-for-value stock option exchange program on July 23, 2018 ("Exchange Program"). The Exchange Program was open to all associates of the Company who held qualified and non-qualified stock options with an exercise prices ranging from $7.79 to $9.17 per share ("Eligible Awards"). Pursuant to the Exchange Program, 129,025 stock options were canceled and replaced with 49,491 stock options ("Replacement Options") at an exercise price equal to the Company's closing stock price on the grant date (July 23, 2018), which was $4.25. The exchange ratio was calculated such that the value of the Replacement Options would approximately equal the value of the canceled Eligible Awards, determined in accordance with the Black-Scholes option valuation model, with no incremental cost incurred by the Company. The estimate of fair value for options granted as part of the Exchange program was $2.08, calculated using an expected volatility of 53.71% and a risk-free interest rate of 2.83%, and a five-year expected term. On the exchange date of July 23, 2018 all of the Eligible Awards were 100% vested and the Replacement Options were issued as 100% vested as of July 23, 2018 with a ten-year exercisable life beginning on the date of grant. The other terms and conditions of each Replacement Option grant are substantially similar to those of the tendered Eligible Awards it replaced. Each Replacement Option was granted under the 2018 Plan. Of the 129,025 tendered Eligible Awards, 129,025 shares were canceled in the 2008 Plan. During the fiscal year ended September 26, 2017, the Company granted a total of 163,992 incentive stock options, from available shares under its 2008 Plan, as amended, with exercise prices between $3.05 and $3.45 and per-share weighted average fair values between $2.17 and $2.49. In addition to the exercise and grant date prices of the stock option awards, certain weighted average assumptions that were used to estimate the fair value of stock option grants are listed in the following table: Incentive and Non-Statutory Stock Options Fiscal Year 2018* 2017 Expected term (years) 7.5 6.5 to 7.5 Expected volatility 75.09% to 80.70% 75.38% to 80.70% Risk-free interest rate 1.49% to 2.80% 1.49% to 2.40% Expected dividends 0 0 *Excluding options issued in the exchange program We estimate expected volatility based on historical weekly price changes of our common stock for a period equal to the current expected term of the options. The risk-free interest rate is based on the United States treasury yields in effect at the time of grant corresponding with the expected term of the options. The expected option term is the number of years we estimate that options will be outstanding prior to exercise considering vesting schedules and our historical exercise patterns. The following table summarizes stock option activity for fiscal year 2018 under all plans: Shares Weighted Weighted Outstanding-beg of year 681,922 $ 4.25 Options granted (1) 147,655 $ 3.68 Options exercised (9,398 ) $ 3.05 Forfeited/Canceled (1) (182,599 ) $ 6.76 Expired (2,933 ) $ 17.25 Outstanding Sept 25, 2018 634,647 $ 3.36 6.4 Exercisable Sept 25, 2018 422,229 $ 3.24 5.3 (1) As of September 25, 2018, the aggregate intrinsic value of the outstanding and exercisable options was $787,000. Only options whose exercise price is below the current market price of the underlying stock are included in the intrinsic value calculation. As of September 25, 2018, the total remaining unrecognized compensation cost related to non-vested stock options was $431,000 and is expected to be recognized over a weighted average period of approximately 2.35 years. There were 9,397 stock options exercised during the fiscal year ended September 25, 2018 with proceeds of $29,000. There were no stock options exercised during the fiscal year ended September 26, 2017. Restricted Stock Units During the fiscal year 2018, the Company granted a total of 37,037 restricted stock units from available shares under its 2008 Plan, as amended. The shares were issued with a grant date fair market value of $2.70 which is equal to the closing price of the stock on the date of the grant. Additionally, the Company granted a total of 60,507 shares of restricted stock during the fiscal year 2018 from available shares under its 2018 Plan. The shares were issued with grant date fair market value of $3.55 which is equal to the closing price of the stock on the date of the grants. All restricted stock units issued under both Plans during the fiscal year 2018 vest over three years following the grant date. During the fiscal year 2017, the Company granted a total of 103,440 shares of restricted stock from available shares under its 2008 Plan, as amended. The shares were issued with grant date fair market values of $3.15 and $3.20 which is equal to the closing price of the stock on the date of the grants. The restricted stock units vest between three months and three years following the grant date. A summary of the status of non-vested restricted stock as of September 25, 2018 and changes during fiscal 2018 is presented below: Shares Grant Date Fair Non-vested shares at beg of year 115,039 $3.15 to $8.60 Granted 97,544 $2.70 to $3.55 Forfeited (18,493 ) $3.15 to $8.60 Vested (44,476 ) $3.15 to $4.18 Non-vested shares at Sept 25, 2018 149,614 $3.15 to $4.18 As of September 25, 2018, there was $341,000 of total unrecognized compensation cost related to non-vested restricted stock. This cost is expected to be recognized over a weighted average period of approximately 1.6 years. Non-controlling Interests The equity interests of the unrelated limited partners and members are shown on the accompanying consolidated balance sheet in the stockholders’ equity section as a non-controlling interest and is adjusted each period to reflect the limited partners’ and members’ share of the net income or loss as well as any cash distributions to the limited partners and members for the period. The limited partners’ and members’ share of the net income or loss in the partnership is shown as non-controlling interest income or expense in the accompanying consolidated statement of operations. All inter-company accounts and transactions are eliminated. The following table summarizes the activity in non-controlling interests during the year ended September 25, 2018 (in thousands): Good Times Bad Daddy’s Total Balance at September 26, 2017 $ 434 $ 2,279 $ 2,713 Income $ 382 $ 635 $ 1,017 Contributions $ - $ 933 $ 933 Distributions $ (439 ) $ (986 ) $ (1,425 ) Balance at September 25, 2018 $ 377 $ 2,861 $ 3,238 Our non-controlling interests consist of one joint venture partnership involving Good Times restaurants and eight joint venture partnerships involving eight Bad Daddy’s restaurants, including three Bad Daddy’s restaurants that opened during fiscal 2018. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Sep. 25, 2018 | |
Retirement Benefits [Abstract] | |
Retirement Plan | 8. Retirement Plan : The Company sponsors a qualified defined contribution 401(k) plan for employees meeting certain eligibility requirements. Under the plan, employees are entitled to make contributions on both a pre-tax basis or on an after-tax basis (Roth Contributions). In fiscal 2015 the Company modified the plan to include a provision to make a Safe Harbor Matching Contribution to all participating employees. The Company will match, on a dollar-for-dollar basis, the first 3% of eligible pay contributed by employees. The Company will also match 50% of each dollar contributed between 3% and 5% of eligible pay contributed by employees. The Company may, at its discretion, make additional contributions to the Plan or change the matching percentage. The Company’s matching contribution expense in fiscal 2018 and 2017 was $201,000 and $122,000, respectively. The matching contribution typically is contributed to the plan in the fiscal year subsequent to the year in which the expense is recognized. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Sep. 25, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | 9. Segment Reporting: All of our Good Times Burgers and Frozen Custard restaurants (Good Times) compete in the quick-service drive-through dining industry while our Bad Daddy’s Burger Bar restaurants (Bad Daddy’s) compete in the full-service upscale casual dining industry. We believe that providing this additional financial information for each of our brands will provide a better understanding of our overall operating results. Income (loss) from operations represents revenues less restaurant operating costs and expenses, directly allocable general and administrative expenses, and other restaurant-level expenses directly associated with each brand including depreciation and amortization, pre-opening costs and losses or gains on disposal of property and equipment. Unallocated corporate capital expenditures are presented below as reconciling items to the amounts presented in the consolidated financial statements. The following tables present information about our reportable segments for the respective periods: Fiscal Year 2018 2017 Revenues Good Times $ 31,460 $ 31,013 Bad Daddy’s 67,780 48,067 $ 99,240 $ 79,080 Income (loss) from operations Good Times $ 496 $ 322 Bad Daddy’s 281 (1,104 ) Corporate (405 ) (640 ) $ 372 $ (1,422 ) Capital Expenditures Good Times $ 342 $ 4,778 Bad Daddy’s 10,082 9,416 Corporate 20 319 $ 10,444 $ 14,513 Property & Equipment, net Good Times $ 5,234 $ 7,061 Bad Daddy’s 29,642 22,133 Corporate 369 496 $ 35,245 $ 29,690 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 25, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events: On October 31, 2018 the Cadence Credit Facility was amended to increase the loan maximum to $17,000,000, extend the maturity date to December 31, 2021, and modify pricing and covenants under the facility (the “2019 Amendment”). As amended by the 2019 Amendment, the Cadence Credit Facility accrues commitment fees on the daily unused balance of the facility at a rate of 0.25%. All borrowings under the Cadence Credit Facility, as amended, bear interest at a variable rate based upon the Company’s election of (i) 2.5% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.250% floor, plus 3.5%. Interest is due at the end of each calendar quarter if the Company selects to pay interest based on the base rate and at the end of each LIBOR period if it selects to pay interest based on LIBOR. As amended by the 2019 Amendment, the Cadence Credit Facility contains certain affirmative and negative covenants and events of default that the Company considers customary for an agreement of this type, including covenants setting a maximum leverage ratio of 5.35:1, a minimum fixed charge coverage ratio of 1.25:1 and minimum liquidity of $2,000,000. Under the 2019 Amendment, there is no longer a 0.25 incurrence test on new borrowings. The Company incurred a minimal amount of loan origination costs associated with the amendment. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 25, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Drive Thru commenced operations in 1986 and as of September 25, 2018, operates nineteen Company-owned and seven joint venture drive-thru fast food hamburger restaurants under the name Good Times Burgers & Frozen Custard. Drive Thru’s restaurants are located in Colorado. In addition, Drive Thru has nine franchises, with seven operating in Colorado and two in Wyoming. BD of Colo commenced operations in 2013 and as of September 25, 2018, operates thirteen Company-owned full-service upscale casual dining restaurants under the name Bad Daddy’s Burger Bar, twelve of which are located in Colorado and one located in Norman, Oklahoma. BDI and BDFD were acquired on May 7, 2015. As of September 25, 2018, BDI operates ten Company-owned and eight joint venture full-service upscale casual dining restaurants, also under the name Bad Daddy’s Burger Bar, thirteen of which are located in North Carolina, three are located in Georgia, and one each are located in Tennessee and South Carolina. BDFD has one franchise operating in South Carolina. We follow accounting standards set by the Financial Accounting Standards Board, commonly referred to as the “FASB”. The FASB sets generally accepted accounting principles (GAAP) that we follow to ensure we consistently report our financial condition, results of operations, and cash flows. |
Fiscal Year | Fiscal Year Fiscal year 2018 began September 27, 2017 and ended September 25, 2018; fiscal year 2017 began September 28, 2016 and ended September 26, 2017. |
Principles of Consolidation | Principles of Consolidation |
Advertising Costs | Advertising Costs |
Accounting Estimates | Accounting Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounts Receivable | Accounts Receivable |
Inventories | Inventories |
Property and Equipment | Property and Equipment Assets are classified as held for sale if they meet the criteria outlined in ASC 360, Property, Plant and Equipment Maintenance and repairs are charged to expense as incurred, and expenditures for major improvements are capitalized. When assets are retired, or otherwise disposed of, the property accounts are relieved of costs and accumulated depreciation with any resulting gain or loss credited or charged to income. |
Trademarks | Trademarks |
Goodwill | Goodwill |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets On January 30, 2018 the Company closed one Good Times restaurant in Aurora, Colorado. A non-cash impairment charge of $219,000 related to this restaurant was previously taken in the fiscal year ended September 26, 2017 and no additional loss from disposal of these assets has been recognized in the current year, nor is any additional loss expected. The Company is currently marketing the property and intends to sublease the property to a suitable tenant over the approximate 17-year remaining term of the lease. The Company expects to be able to sublease this property at or above its contractual lease rate but does not expect such sublease commencement until fiscal 2019. As such, we recorded non-cash rent of approximately $48,000 reflecting the expected fair value of future lease costs, net of sublease income, associated with the closing of this restaurant. Given the results of our analysis at March 27, 2018, we identified one restaurant where the expected future cash flows would not be sufficient to recover the carrying value of the associated assets. This restaurant, an additional Good Times restaurant in Aurora, Colorado, was closed on April 22, 2018. We recorded a non-cash charge of $72,000 related to the impairment of this restaurant during the quarter ending March 27, 2018. No additional loss from disposal of assets is expected associated with this property. Prior to its closure, on April 6, 2018, the Company entered into a sublease of this property, the terms of which will provide sublease income substantially equal to the lease costs over the approximate five remaining years of the lease. |
Sales of Restaurants and Restaurant Equity Interests | Sales of Restaurants and Restaurant Equity Interests The Company accounts for the sale of restaurants when the risks and other incidents of ownership have been transferred to the buyer. Specifically, a) no continuing involvement by the Company exists in restaurants that are sold, b) sales contracts and related income recognition are not dependent on the future successful operations of the sold restaurants, and c) the Company is not involved as a guarantor on the purchasers’ debts. |
Deferred Liabilities | Deferred Liabilities Lease incentives are recorded as a deferred liability when received and subsequently credited to rent expense on a straight-line basis over the life of the lease. The balance of the lease incentive obligations at September 25, 2018 was $5,309,000 and is reflected in the accompanying consolidated balance sheet as a deferred liability. Also included in the $7,922,000 deferred and other liabilities balance are other long-term liabilities of $8,000 and a $351,000 deferred gain on the sale of the building and improvements of two Company-owned Good Times restaurants in sale leaseback transactions. The building and improvements were subsequently leased back from the third-party purchaser. The gain will be recognized in future periods in proportion to the rents paid on the twenty-year lease. |
Revenue Recognition | Revenue Recognition Restaurant Sales: Revenue from Company restaurant sales is recognized when the food and beverage products are sold and are presented net of sales taxes. Franchise and Area Development Fees: Individual franchise fee revenue is deferred when received and is recognized as income when the Company has substantially performed all of its obligations under the franchise agreement and the franchisee has commenced operations. The Company’s commitments and obligations pursuant to the franchise agreements consist of a) development assistance; including site selection, building specifications and equipment purchasing, and b) operating assistance; including training of personnel and preparation and distribution of manuals and operating materials. All of these obligations are effectively complete upon the opening of the restaurant at which time the franchise fee and the portion of any development fee allocable to that restaurant is recognized. There are no additional material commitments or obligations. The Company has not recognized any franchise fees that have not been collected. The Company segregates initial franchise fees from other franchise revenue in the statement of operations. Revenues and costs related to Company-owned restaurants are segregated from revenues and costs related to franchised restaurants in the statement of operations. Continuing royalties from franchisees, which are a percentage of the gross sales of franchised operations, are recognized as income when earned. Franchise development expenses, which consist primarily of legal costs and restaurant opening expenses associated with developing and opening franchise restaurants, are expensed against the related franchise fee income. |
Preopening Costs | Preopening Costs |
Income Taxes | Income Taxes The Company is subject to U.S. federal income tax and income tax in multiple U.S state jurisdictions. The Company continues to remain subject to examination by federal authorities and state jurisdictions generally for fiscal years after 2014. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company's financial condition, results of operations, or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. No accrual for interest and penalties was considered necessary as of September 25, 2018. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share |
Financial Instruments and Concentrations of Credit Risk | Financial Instruments and Concentrations of Credit Risk Financial instruments potentially subjecting the Company to concentrations of credit risk consist principally of receivables. At September 25, 2018 notes receivable totaled $46,000 and is due from three entities. Additionally, the Company has other current receivables totaling $1,735,000, which includes $84,000 of franchise receivables, $1,014,000 related to lease incentives, $355,000 due from non-controlling interest members, and $282,000 for miscellaneous receivables which are all due in the normal course of business. The Company believes it will collect fully on all notes and receivables. The Company purchases most of its restaurant food and paper from two vendors. The Company believes a sufficient number of other suppliers exist from which food and paper could be purchased to prevent any long-term, adverse consequences. The Company operates in two industry segments, quick service restaurants and casual dining restaurants. A geographic concentration exists because the Company’s customers are generally located in Colorado and the Southeast region of the U.S., most significantly in North Carolina. |
Stock-Based Compensation | Stock-Based Compensation |
Variable Interest Entities | Variable Interest Entities |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following three levels of inputs may be used to measure fair value and require that the assets or liabilities carried at fair value are disclosed by the input level under which they were valued. Level 1: Quoted market prices in active markets for identical assets and liabilities. Level 2: Observable inputs other than defined in Level 1, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are not corroborated by observable market data. |
Non-controlling Interests | Non-controlling Interests Our non-controlling interests consist of one joint venture partnership involving Good Times restaurants and eight joint venture partnerships involving eight Bad Daddy’s restaurants, including three Bad Daddy’s restaurants opened during fiscal 2018. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09 , “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.” In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment,” In August 2018, the FASB issued ASU No. 2018-16 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 25, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Intangible Assets | The following table presents goodwill and intangible assets as of September 25, 2018 and September 26, 2017 (in thousands): September 25, 2018 September 26, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets subject to Franchise rights 116 (81 ) 35 116 (58 ) 58 Non-compete agreements 15 (15 ) - 15 (12 ) 3 $ 131 $ (96 ) $ 35 $ 131 $ (70 ) $ 61 Indefinite-lived intangible Trademarks $ 3,900 $ - $ 3,900 $ 3,900 $ - $ 3,900 Intangible assets, net $ 4,031 $ (96 ) $ 3,935 $ 4,031 $ (70 ) $ 3,961 Goodwill $ 15,150 $ - $ 15,150 $ 15,150 $ - $ 15,150 |
Schedule of Estimated Aggregate Future Amortization Expense For Finite-Lived Intangible Assets | The estimated aggregate future amortization expense as of September 25, 2018 is as follows (in thousands): 2019 $ 23 2020 12 $ 35 |
Debt and Capital Leases (Tables
Debt and Capital Leases (Tables) | 12 Months Ended |
Sep. 25, 2018 | |
Debt and Capital Lease Obligations [Abstract] | |
Schedule of Debt and Capital Leases | 2018 2017 Cadence Bank credit facility 7,450 5,300 Notes payable with Ally Financial with payments of principal and interest 39 56 7,489 5,356 Less current portion (17 ) (17 ) Long term portion $ 7,472 $ 5,339 |
Schedule of Principal Payments of Debt | As of September 25, 2018, principal payments on debt become due as follows: Periods Ending September, 2019 17 2020 11 2021 7,460 2022 1 $ 7,489 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 12 Months Ended |
Sep. 25, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities consist of the following: September 25, September 26, Wages and other employee benefits $ 2,075 $ 1,551 Taxes, other than income tax 1,516 1,394 Other 861 602 Total $ 4,452 $ 3,547 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 25, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Operating Lease Activities | Following is a summary of operating lease activity for the fiscal years ended September 25, 2018 and September 26, 2017: 2018 2017 Minimum rentals $ 5,972 $ 4,755 Less sublease rentals (404 ) (388 ) Net rent paid $ 5,568 $ 4,367 |
Schedule of Future Minimum Rental Commitments | As of September 25, 2018, future minimum rental commitments required under the Company’s operating leases that have initial or remaining non-cancellable lease terms in excess of one year are as follows: Years Ending September 2019 $ 6,707 2020 6,194 2021 5,721 2022 5,587 2023 5,242 Thereafter 19,936 49,387 Less sublease rentals (1,124 ) $ 48,263 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 25, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets (liabilities) are comprised of the following at the period end: 2018 2017 Current Long-Term Current Long-Term Deferred assets (liabilities): Tax effect of net operating loss carry-forward $ - $ 3,605 $ - $ 4,084 General business credits - 2,264 - 1,378 Partnership/joint venture basis differences - (63 ) - (126 ) Deferred revenue - 111 - 75 Property and equipment basis differences - (1,444 ) - (859 ) Intangibles basis differences - (803 ) - (705 ) Other accrued liability and asset difference 128 1,055 117 1,454 Net deferred tax assets 128 4,725 117 5,301 Less valuation allowance* (128 ) (4,725 ) (117 ) (5,301 ) Net deferred tax assets $ - $ - $ - $ - * The valuation allowance decreased by $565,000 during the year ended September 25, 2018. |
Schedule of Income Tax Expense | Total income tax expense for the years ended September 25, 2018 and September 26, 2017 differed from the amounts computed by applying the U.S. Federal statutory tax rates to pre-tax income as follows: 2018 2017 Total benefit computed by applying statutory federal rate $ (299 ) $ (789 ) State income tax, net of federal tax benefit (41 ) (68 ) FICA/WOTC tax credits (612 ) (432 ) Tax Reform Impact 1,305 0 Effect of change in valuation allowance (565 ) 1,194 Permanent differences 78 119 Other 134 (24 ) Provision for income taxes $ 0 $ 0 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Sep. 25, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Weighted Average Assumptions Used to Estimate Fair Value of Stock Option Grants | In addition to the exercise and grant date prices of the stock option awards, certain weighted average assumptions that were used to estimate the fair value of stock option grants are listed in the following table: Incentive and Non-Statutory Stock Options Fiscal Year 2018* 2017 Expected term (years) 7.5 6.5 to 7.5 Expected volatility 75.09% to 80.70% 75.38% to 80.70% Risk-free interest rate 1.49% to 2.80% 1.49% to 2.40% Expected dividends 0 0 *Excluding options issued in the exchange program |
Schedule of Stock Option Activity under Share Based Compensation Plan | The following table summarizes stock option activity for fiscal year 2018 under all plans: Shares Weighted Weighted Outstanding-beg of year 681,922 $ 4.25 Options granted (1) 147,655 $ 3.68 Options exercised (9,398 ) $ 3.05 Forfeited/Canceled (1) (182,599 ) $ 6.76 Expired (2,933 ) $ 17.25 Outstanding Sept 25, 2018 634,647 $ 3.36 6.4 Exercisable Sept 25, 2018 422,229 $ 3.24 5.3 |
Schedule of Non-vested Restricted Stock Activity | A summary of the status of non-vested restricted stock as of September 25, 2018 and changes during fiscal 2018 is presented below: Shares Grant Date Fair Non-vested shares at beg of year 115,039 $3.15 to $8.60 Granted 97,544 $2.70 to $3.55 Forfeited (18,493 ) $3.15 to $8.60 Vested (44,476 ) $3.15 to $4.18 Non-vested shares at Sept 25, 2018 149,614 $3.15 to $4.18 |
Schedule of Noncontrolling Interest | The following table summarizes the activity in non-controlling interests during the year ended September 25, 2018 (in thousands): Good Times Bad Daddy’s Total Balance at September 26, 2017 $ 434 $ 2,279 $ 2,713 Income $ 382 $ 635 $ 1,017 Contributions $ - $ 933 $ 933 Distributions $ (439 ) $ (986 ) $ (1,425 ) Balance at September 25, 2018 $ 377 $ 2,861 $ 3,238 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Sep. 25, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments | The following tables present information about our reportable segments for the respective periods: Fiscal Year 2018 2017 Revenues Good Times $ 31,460 $ 31,013 Bad Daddy’s 67,780 48,067 $ 99,240 $ 79,080 Income (loss) from operations Good Times $ 496 $ 322 Bad Daddy’s 281 (1,104 ) Corporate (405 ) (640 ) $ 372 $ (1,422 ) Capital Expenditures Good Times $ 342 $ 4,778 Bad Daddy’s 10,082 9,416 Corporate 20 319 $ 10,444 $ 14,513 Property & Equipment, net Good Times $ 5,234 $ 7,061 Bad Daddy’s 29,642 22,133 Corporate 369 496 $ 35,245 $ 29,690 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Advertising expenses | $ 342,000 | $ 365,000 |
Due from non controlling interest | 355,000 | |
FDIC insured limit | 250,000 | |
Goodwill | 15,150,000 | 15,150,000 |
Asset impairment costs | 72,000 | 219,000 |
Deferred rent | 2,253,000 | |
Lease incentive obligation | 5,309,000 | |
Deferred and other liabilities | 7,922,000 | 5,614,000 |
Other long term liabilities | 8,000 | |
Deferred gain on sale of building and improvements | 351,000 | |
Notes receivable | 46,000 | |
Receivables | 1,735,000 | 573,000 |
Franchise receivables | 84,000 | |
Lease incentive | 1,014,000 | |
Receivable from advertising cooperative fund | 282,000 | |
Proceeds from sale leaseback transaction | 1,397,000 | 1,927,000 |
Assets held for sale | $ 1,221,000 | |
Expected fair value of future lease costs | $ 48,000 | |
Minimum [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Estimated useful lives | 3 years | |
Maximum [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Estimated useful lives | 8 years | |
Four of Bad Daddy's limited liability companies [Member] | Minimum [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Ownership interest | 50.00% | |
Four of Bad Daddy's limited liability companies [Member] | Maximum [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Ownership interest | 58.00% | |
One of Bad Daddy's limited liability companies [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Ownership interest | 23.00% | |
Bad Daddy's International, LLC [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Goodwill | $ 15,054,000 | |
Good Times Drive Thru Inc. [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Goodwill | $ 96,000 | |
Stock Options [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Shares with anti-dilutive effect excluded from the computation of Diluted EPS | 784,261 | 796,961 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 25,000 | $ 28,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Intangible Assets Subject to Amortization) (Details) - USD ($) $ in Thousands | Sep. 25, 2018 | Sep. 26, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 131 | $ 131 |
Accumulated Amortization | (96) | (70) |
Net Carrying Amount | 35 | 61 |
Franchise Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 116 | 116 |
Accumulated Amortization | (81) | (58) |
Net Carrying Amount | 35 | 58 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15 | 15 |
Accumulated Amortization | (15) | (12) |
Net Carrying Amount | $ 3 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Indefinite-lived Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 25, 2018 | Sep. 26, 2017 |
Trademarks and Trade Names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | $ 3,900 | $ 3,900 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Schedule of Goodwill and Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 25, 2018 | Sep. 26, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets, gross carrying amount | $ 4,031 | $ 4,031 |
Accumulated Amortization | (96) | (70) |
Intangible Assets, Net (Excluding Goodwill) | 3,935 | 3,961 |
Goodwill, Gross | 15,150 | 15,150 |
Goodwill, Impaired, Accumulated Impairment Loss | ||
Goodwill | $ 15,150 | $ 15,150 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets (Estimated Aggregate Future Amortization Expense) (Details) - USD ($) $ in Thousands | Sep. 25, 2018 | Sep. 26, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 23 | |
2,020 | 12 | |
Net Carrying Amount | $ 35 | $ 61 |
Debt and Capital Leases (Narrat
Debt and Capital Leases (Narrative) (Details) - USD ($) | Sep. 11, 2017 | Sep. 25, 2018 | Sep. 26, 2017 |
Debt Instrument [Line Items] | |||
Interest expense | $ 392,000 | $ 191,000 | |
Cadence Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Loan Agreement, amount | 9,000,000 | ||
Loan Agreement, amount outstanding | $ 7,450,000 | ||
Loan agreement, increase amount | $ 12,000,000 | ||
Interest rate | 0.25% | ||
Weighted average interest rate | 6.1229% | ||
Interest rate description | All borrowings under the Cadence Credit Facility bear interest at a variable rate based upon the Company’s election of (i) 3.0% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.125% floor, plus 4.0%. Interest is due at the end of each calendar quarter if the Company selects to pay interest based on the base rate and at the end of each LIBOR period if it selects to pay interest based on LIBOR. | ||
Payment of debt issuance costs | $ 197,000 | ||
Maturity date | Dec. 31, 2020 | ||
Minimum liquidity amount | 2,500,000 | ||
Letters of credit outstanding, amount | $ 157,500 |
Debt and Capital Leases (Schedu
Debt and Capital Leases (Schedule of Debt and Capital Leases) (Details) - USD ($) $ in Thousands | Sep. 25, 2018 | Sep. 26, 2017 |
Debt Instrument [Line Items] | ||
Debt and Capital Leases | $ 7,489 | $ 5,356 |
Less current portion | (17) | (17) |
Long term portion | 7,472 | 5,339 |
Cadence Bank credit facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt and Capital Leases | 7,450 | 5,300 |
Notes payable with Ally Financial with payments of principal and interest (approximately 5%) due monthly [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 39 | $ 56 |
Debt and Capital Leases (Sche_2
Debt and Capital Leases (Schedule of Debt and Capital Leases) (Paranthetical) (Details) - Notes payable with Ally Financial with payments of principal and interest (approximately 5%) due monthly [Member] | Sep. 25, 2018 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 3.90% |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 5.00% |
Debt and Capital Leases (Sche_3
Debt and Capital Leases (Schedule of Principal Payments on Debt) (Details) $ in Thousands | Sep. 25, 2018USD ($) |
Debt and Capital Lease Obligations [Abstract] | |
2,019 | $ 17 |
2,020 | 11 |
2,021 | 7,460 |
2,022 | 1 |
Long-term Debt, Total | $ 7,489 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 25, 2018 | Sep. 26, 2017 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Wages and other employee benefits | $ 2,075 | $ 1,551 |
Taxes, other than income tax | 1,516 | 1,394 |
Other | 861 | 602 |
Total | $ 4,452 | $ 3,547 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Operating Leased Assets [Line Items] | ||
Term of operating leases | 19 years | |
Contingent rent | $ 83,000 | $ 55,000 |
Net commitments outstanding | $ 451,000 | |
Minimum [Member] | ||
Operating Leased Assets [Line Items] | ||
Lease Expiration Date | Jan. 1, 2019 | |
Maximum [Member] | ||
Operating Leased Assets [Line Items] | ||
Lease Expiration Date | Dec. 31, 2024 |
Commitments and Contingencies_3
Commitments and Contingencies (Summary of Operating Lease Activities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum rentals | $ 5,972 | $ 4,755 |
Less sublease rentals | (404) | (388) |
Net rent paid | $ 5,568 | $ 4,367 |
Commitments and Contingencies_4
Commitments and Contingencies (Future Minimum Rental Commitments) (Details) $ in Thousands | Sep. 25, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 6,707 |
2,020 | 6,194 |
2,021 | 5,721 |
2,022 | 5,587 |
2,023 | 5,242 |
Thereafter | 19,936 |
Total | 49,387 |
Less sublease rentals | (1,124) |
Operating Leases Future Minimum Payments Due, Net | $ 48,263 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | ||||
Sep. 25, 2018 | Sep. 26, 2017 | Sep. 27, 2016 | Sep. 30, 2015 | Sep. 30, 2012 | |
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carry forwards | $ 4,129,000 | $ 2,601,000 | $ 9,249,000 | ||
Operating loss carry-forwards utilization limit | $ 160,000 | ||||
General business tax credits | $ 2,264,000 | $ 2,264,000 | $ 2,264,000 | $ 2,264,000 | |
U.S. statutory rate | 28.10% | 35.00% | |||
Tax expense from remeasurement of existing deferred tax assets and liabilities | $ 1,300,000 | ||||
Minimum [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating Loss Carryforwards, Expiration year | 2,025 | ||||
General business tax credits expiration year | 2,034 | ||||
Maximum [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Operating Loss Carryforwards, Expiration year | 2,037 | ||||
General business tax credits expiration year | 2,038 |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 25, 2018 | Sep. 26, 2017 | |
Current [Member] | |||
Deferred assets (liabilities): | |||
Tax effect of net operating loss carry-forward | |||
General business credits | |||
Partnership/Joint Venture basis differences | |||
Deferred revenue | |||
Property and equipment basis differences | |||
Intangibles basis differences | |||
Other accrued liability and asset difference | 128 | 117 | |
Net deferred tax assets | 128 | 117 | |
Less valuation allowance | [1] | (128) | (117) |
Net deferred tax assets | |||
Long Term [Member] | |||
Deferred assets (liabilities): | |||
Tax effect of net operating loss carry-forward | 3,605 | 4,084 | |
General business credits | 2,264 | 1,378 | |
Partnership/Joint Venture basis differences | (63) | (126) | |
Deferred revenue | 111 | 75 | |
Property and equipment basis differences | (1,444) | (859) | |
Intangibles basis differences | (803) | (705) | |
Other accrued liability and asset difference | 1,055 | 1,454 | |
Net deferred tax assets | 4,725 | 5,301 | |
Less valuation allowance | [1] | (4,725) | (5,301) |
Net deferred tax assets | |||
[1] | The valuation allowance decreased by $565,000 during the year ended September 25, 2018. |
Income Taxes (Schedule of Def_2
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Paranthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effect of decrease in valuation allowance | $ (565) | $ 1,194 |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income Tax Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Income Tax Disclosure [Abstract] | ||
Total benefit computed by applying statutory federal rate | $ (299) | $ (789) |
State income tax, net of federal tax benefit | (41) | (68) |
FICA/WOTC tax credits | (612) | (432) |
Tax Reform Impact | 1,305 | 0 |
Effect of change in valuation allowance | (565) | 1,194 |
Permanent differences | 78 | 119 |
Other | 134 | (24) |
Provision for income taxes | $ 0 | $ 0 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Sep. 25, 2018 | Sep. 26, 2017 | ||
Schedule Of Stockholders Equity [Line Items] | |||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Common stock, shares authorized | 50,000,000 | 50,000,000 | |
Common stock, shares outstanding | 12,481,162 | 12,427,280 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Stock based compensation expense | $ 417,000 | $ 748,000 | |
Stock option exercise | $ 29,000 | ||
Stock option exercise, shares | 9,397 | ||
Aggregate intrinsic value of outstanding options | $ 787,000 | ||
Incentive Stock Option [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, shares | 18,274 | 163,992 | |
Incentive Stock Option [Member] | Minimum [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, exercise price | $ 2.70 | $ 3.05 | |
Stock options granted, per-share weighted average fair value | 1.65 | 2.17 | |
Incentive Stock Option [Member] | Maximum [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, exercise price | 2.73 | 3.45 | |
Stock options granted, per-share weighted average fair value | $ 1.95 | $ 2.49 | |
Incentive and Non-Statutory Stock Options [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, shares | 129,381 | ||
Expected term (years) | [1] | 7 years 6 months | |
Incentive and Non-Statutory Stock Options [Member] | Minimum [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, exercise price | $ 3.55 | ||
Stock options granted, per-share weighted average fair value | 2.08 | ||
Expected term (years) | 6 years 6 months | ||
Incentive and Non-Statutory Stock Options [Member] | Maximum [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, exercise price | 4.25 | ||
Stock options granted, per-share weighted average fair value | $ 2.52 | ||
Expected term (years) | 7 years 6 months | ||
Restricted Stock [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Restricted stock granted, shares | 97,544 | 103,440 | |
Restricted stock granted, weighted average grant date fair value per share | $ 2.70 | ||
Vesting period | 3 years | 3 years | |
Remaining total unrecognized compensation cost related to unvested stock-based arrangements | $ 341,000 | ||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition | 1 year 7 months 6 days | ||
Restricted Stock [Member] | Minimum [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Restricted stock granted, weighted average grant date fair value per share | $ 2.70 | $ 3.15 | |
Restricted Stock [Member] | Maximum [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Restricted stock granted, weighted average grant date fair value per share | $ 3.55 | $ 3.20 | |
Stock Options [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, shares | [2] | 147,655 | |
Stock options granted, exercise price | [2] | $ 3.68 | |
Remaining total unrecognized compensation cost related to unvested stock-based arrangements | $ 431,000 | ||
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition | 2 years 4 months 6 days | ||
Stock option exercise, shares | 9,398 | ||
Replacement Options [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, shares | 49,491 | ||
Stock options granted, exercise price | $ 4.25 | ||
Vesting period | 10 years | ||
Percentage of vested options | 100.00% | ||
Two Thousand Eight Equity Incentive Compensation Plan [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Shares authorized to issue under plan | 1,500,000 | ||
2018 Plan [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Shares authorized to issue under plan | 750,000 | ||
Shares available for future grants | 499,605 | ||
2018 Plan [Member] | Restricted Stock [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Restricted stock granted, shares | 60,507 | ||
Restricted stock granted, weighted average grant date fair value per share | $ 3.55 | ||
Vesting period | 3 years | ||
Exchange Program [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, shares | 129,025 | ||
Stock options granted, per-share weighted average fair value | $ 2.08 | ||
Percentage of vested options | 100.00% | ||
Expected volatility | 53.71% | ||
Risk-free interest rate | 2.83% | ||
Expected term (years) | 5 years | ||
Exchange Program [Member] | Minimum [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, exercise price | $ 7.79 | ||
Exchange Program [Member] | Maximum [Member] | |||
Schedule Of Stockholders Equity [Line Items] | |||
Stock options granted, exercise price | $ 9.17 | ||
[1] | Excluding options issued in the exchange program | ||
[2] | In connection with the Exchange Program, 129,025 options to purchase common stock were canceled, and 49,491 Replacement Options were granted. |
Stockholders' Equity (Weighted
Stockholders' Equity (Weighted Average Assumptions Used to Estimate Fair Value of Stock Option Grants) (Details) - Incentive and Non-Statutory Stock Options [Member] - USD ($) | 12 Months Ended | |||
Sep. 25, 2018 | Sep. 26, 2017 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | [1] | 7 years 6 months | ||
Expected volatility, minimum | 75.09% | [1] | 75.38% | |
Expected volatility, maximum | 80.70% | [1] | 80.70% | |
Risk free interest rate, minimum | 1.49% | [1] | 1.49% | |
Risk free interest rate, maximum | 2.80% | [1] | 2.40% | |
Expected dividends | $ 0 | [1] | $ 0 | |
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 6 years 6 months | |||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (years) | 7 years 6 months | |||
[1] | Excluding options issued in the exchange program |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Stock Option Activity under Share Based Compensation Plan) (Details) - $ / shares | 12 Months Ended | ||
Sep. 25, 2018 | Sep. 26, 2017 | ||
Shares | |||
Options exercised | (9,397) | ||
Stock Options [Member] | |||
Shares | |||
Outstanding-beg of year | 681,922 | ||
Options granted | [1] | 147,655 | |
Options exercised | (9,398) | ||
Forfeited/Canceled | [1] | (182,599) | |
Expired | (2,933) | ||
Outstanding Sept 25, 2018 | 634,647 | 681,922 | |
Exercisable Sept 25, 2018 | 422,229 | ||
Weighted Average Exercise Price | |||
Outstanding-beg of year | $ 4.25 | ||
Options granted | [1] | 3.68 | |
Options exercised | 3.05 | ||
Forfeited/Canceled | [1] | 6.76 | |
Expired | 17.25 | ||
Outstanding Sept 25, 2018 | 3.36 | $ 4.25 | |
Exercisable Sept 25, 2018 | $ 3.24 | ||
Weighted Average Remaining Contractual Life (Yrs.) | |||
Outstanding Sept 25, 2018 | 6 years 4 months 24 days | ||
Exercisable Sept 25, 2018 | 5 years 3 months 19 days | ||
[1] | In connection with the Exchange Program, 129,025 options to purchase common stock were canceled, and 49,491 Replacement Options were granted. |
Stockholders' Equity (Summary_2
Stockholders' Equity (Summary of Non-vested Restricted Stock Activity) (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Shares | ||
Non-vested shares at beg of year | 115,039 | |
Granted | 97,544 | 103,440 |
Forfeited | (18,493) | |
Vested | (44,476) | |
Non-vested shares at Sept 25, 2018 | 149,614 | 115,039 |
Grant Date Fair Value Per Share | ||
Granted | $ 2.70 | |
Minimum [Member] | ||
Grant Date Fair Value Per Share | ||
Non-vested shares at beg of year | 3.15 | |
Granted | 2.70 | $ 3.15 |
Forfeited | 3.15 | |
Vested | 3.15 | |
Non-vested shares at Sept 25, 2018 | 3.15 | 3.15 |
Maximum [Member] | ||
Grant Date Fair Value Per Share | ||
Non-vested shares at beg of year | 8.60 | |
Granted | 3.55 | 3.20 |
Forfeited | 8.60 | |
Vested | 4.18 | |
Non-vested shares at Sept 25, 2018 | $ 4.18 | $ 8.60 |
Stockholders' Equity (Summary_3
Stockholders' Equity (Summary of Activity in Non-Controlling Interests) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Noncontrolling Interest [Line Items] | ||
Balance at September 26, 2017 | $ 2,713 | |
Income | 1,017 | $ 650 |
Contributions | 933 | 1,421 |
Distributions | (1,425) | (1,043) |
Balance at September 25, 2018 | 3,238 | 2,713 |
Good Times Drive Thru Inc. [Member] | ||
Noncontrolling Interest [Line Items] | ||
Balance at September 26, 2017 | 434 | |
Income | 382 | |
Contributions | 0 | |
Distributions | (439) | |
Balance at September 25, 2018 | 377 | 434 |
Bad Daddy's International, LLC [Member] | ||
Noncontrolling Interest [Line Items] | ||
Balance at September 26, 2017 | 2,279 | |
Income | 635 | |
Contributions | 933 | |
Distributions | (986) | |
Balance at September 25, 2018 | $ 2,861 | $ 2,279 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Retirement Benefits [Abstract] | ||
Percentage of gross pay matched by employer on dollar-for-dollar basis | 3.00% | |
Percentage of each dollar of employee contributions matched by employer | 50.00% | |
Maximum employee contribution percentage | 5.00% | |
Matching contributions | $ 201,000 | $ 122,000 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 25, 2018 | Sep. 26, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 99,240 | $ 79,080 |
Income (loss) from operations | 372 | (1,422) |
Capital Expenditures | 10,444 | 14,513 |
Property & Equipment, net | 35,245 | 28,469 |
Good Times Burgers And Frozen Custard Restaurants [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 31,460 | 31,013 |
Income (loss) from operations | 496 | 322 |
Capital Expenditures | 342 | 4,778 |
Property & Equipment, net | 5,234 | 7,061 |
Bad Daddys Burger Bar Restaurant [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 67,780 | 48,067 |
Income (loss) from operations | 281 | (1,104) |
Capital Expenditures | 10,082 | 9,416 |
Property & Equipment, net | 29,642 | 22,133 |
Corporate Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Income (loss) from operations | (405) | (640) |
Capital Expenditures | 20 | 319 |
Property & Equipment, net | $ 369 | $ 496 |
Subsequent Events (Details)
Subsequent Events (Details) - Cadence Credit Facility [Member] - USD ($) | Sep. 11, 2017 | Oct. 31, 2018 | Sep. 25, 2018 |
Subsequent Event [Line Items] | |||
Loan Agreement, amount | $ 9,000,000 | ||
Maturity date | Dec. 31, 2020 | ||
Interest rate | 0.25% | ||
Interest rate description | All borrowings under the Cadence Credit Facility bear interest at a variable rate based upon the Company’s election of (i) 3.0% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.125% floor, plus 4.0%. Interest is due at the end of each calendar quarter if the Company selects to pay interest based on the base rate and at the end of each LIBOR period if it selects to pay interest based on LIBOR. | ||
Minimum liquidity amount | $ 2,500,000 | ||
Payment of debt issuance costs | $ 197,000 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Loan Agreement, amount | $ 17,000,000 | ||
Maturity date | Dec. 31, 2021 | ||
Interest rate | 0.25% | ||
Interest rate description | All borrowings under the Cadence Credit Facility, as amended, bear interest at a variable rate based upon the Company’s election of (i) 2.5% plus the base rate, which is the highest of the (a) Federal Funds Rate plus 0.5%, (b) the Cadence bank publicly-announced prime rate, and (c) LIBOR plus 1.0%, or (ii) LIBOR, with a 0.250% floor, plus 3.5%. Interest is due at the end of each calendar quarter if the Company selects to pay interest based on the base rate and at the end of each LIBOR period if it selects to pay interest based on LIBOR. | ||
Minimum liquidity amount | $ 2,000,000 | ||
Maximum leverage ratio | 5.35:1 | ||
Minimum fixed charge coverage ratio | 1.25:1 |