Good Times(GTIM) - 2025 Q4 - Annual Report

Financial Performance - Fiscal 2025 net revenues decreased by $750,000 (0.5%) to $141,630,000 from $142,380,000 in fiscal 2024[17] - Same store sales decreased by 2.1% at Bad Daddy's brand and by 5.0% at Good Times brand during fiscal 2025[17] - Total interest expense on notes payable was $191,000 for fiscal 2025, compared to $108,000 for fiscal 2024[26] - Good Times experienced a same store sales decrease of 5.0% in fiscal 2025, following a 2.9% increase in fiscal 2024, with a compound annual growth rate of 3.5% from fiscal 2015 to 2025[36] Cash and Debt Management - As of September 30, 2025, the company ended with $2.6 million in cash and $2.3 million in long-term debt[17] - The Cadence Credit Facility allows for loans up to $8,000,000, with an interest rate of 7.27% as of September 30, 2025[22] - The Cadence Credit Facility allows for loans up to $8,000,000, with a maturity date of April 20, 2028, and an interest rate of 7.27% as of September 30, 2025[20][22] Share Repurchase and Stock Performance - The company has repurchased a total of 1,822,246 shares at an aggregate cost of approximately $5,019,000 under its share repurchase program[19] Sales and Revenue Streams - Off-premises sales accounted for approximately 27% of all system-wide sales in fiscal 2025[30] - Bad Daddy's restaurants averaged $2.6 million in sales for fiscal 2025, a decline from fiscal 2024, but income from operations increased year over year[45] - Total alcoholic beverages account for approximately 12% of all sales and 16% of on-premises sales in Bad Daddy's restaurants[37] - Bad Daddy's average sales per transaction are approximately $38, with lunch representing 33% and dinner/happy hour 67% of sales[30] Operational Strategy - The company emphasizes operational excellence and financial discipline, aiming for growth while maintaining a low debt load[39] - The company aims to enhance operational capabilities while managing expenses, particularly in cost of sales and labor[47] - The company has implemented a cloud-based point-of-sale system across all company-owned Good Times restaurants, with plans to complete implementation at Bad Daddy's locations within 18 months[78] Brand Development and Growth Plans - Bad Daddy's brand is focused on disciplined unit growth, primarily financed from operating cash flow, with significant expansion potential due to small market penetration[40] - The company anticipates that most of its unit growth will come from the development of additional Bad Daddy's Burger Bar locations[98] - Good Times does not have explicit plans for additional restaurant development but may consider opportunistic growth in Colorado and surrounding states[49] Employee and Operational Structure - As of September 30, 2025, the company employed approximately 2,078 active employees, with 1,839 being hourly team members and 239 salaried managers or professional staff[82] - Bad Daddy's Burger Bar utilizes a team of three to four managers per restaurant, with a bonus pool based on sales and operational objectives to incentivize performance[68] Marketing and Customer Engagement - The marketing strategy for Bad Daddy's Burger Bar focuses on local store marketing and community events, supplemented by targeted social and digital media investments[63] - Good Times aims to drive same-store sales by attracting new customers and increasing visit frequency, while also highlighting product differentiation[64] Competitive Landscape - The restaurant industry is highly competitive, with Bad Daddy's Burger Bar facing competition from both local and national gourmet burger concepts[83] - Good Times competes with several hamburger-oriented quick-service restaurants, including those with greater financial resources and market presence[84] - Good Times may have a competitive advantage in product quality compared to traditional quick-service burger chains, but faces challenges from established competitors with greater financial resources[86] Regulatory and Compliance Issues - The company is subject to various health, safety, and labor regulations, which could impact restaurant operations and development[88] - Each restaurant is subject to various health and safety regulations, which could delay new openings if licenses are not obtained[88] Franchise Operations - The company operates two reportable business segments: Good Times Burgers and Frozen Custard, and Bad Daddy's Burger Bar[91] - The company actively monitors franchisee performance and provides support in areas such as menu management and marketing to ensure compliance with operational standards[77] - The company is subject to federal and state laws regulating franchise operations, which may impose restrictions on franchise agreements[89] Future Outlook - Forward-looking statements indicate expectations for unit growth primarily through the development of additional Bad Daddy's Burger Bar locations[98] - Management believes it will have adequate cash from operations and credit facility borrowings to meet future capital expenditure and working capital requirements in fiscal 2026[98]