Good Times(GTIM) - 2021 Q4 - Annual Report

Financial Performance - Net revenues for fiscal 2021 increased by $14,095,000 (12.8%) to $123,953,000 from $109,858,000 in fiscal 2020[17] - The company ended fiscal 2021 with $8.9 million in cash and no long-term debt[17] - Total interest expense on notes payable and capital leases was $269,000 for fiscal 2021[32] - The company received full forgiveness of PPP loans totaling $11,778,226, recognized as gain on debt extinguishment[31] Sales Performance - Bad Daddy's brand had an 18.2% increase in same store sales for fiscal 2021[17] - Good Times brand had a 10.5% increase in same store sales for fiscal 2021[17] - Average restaurant sales for Bad Daddy's reached $2.4 million in Fiscal 2021, exceeding initial projections of $2.1 million[37] - Off-premise sales accounted for approximately 33% of all system-wide sales in Fiscal 2021, a 3% increase from Fiscal 2020 and a 22% increase from Fiscal 2019[36] - Same-store sales for Good Times increased by 10.5% in Fiscal 2021, following a 7.9% increase in Fiscal 2020[44] - Bad Daddy's restaurants achieved average sales per square foot of approximately $619 in Fiscal 2021, indicating strong performance[37] Expansion and Growth Strategy - The company opened two new Bad Daddy's restaurants in the second half of Fiscal 2021, continuing its expansion strategy[37] - The company plans to pursue disciplined unit growth for Bad Daddy's Burger Bar, focusing on cash flow rather than significant debt financing[58] - The company expects to develop Bad Daddy's locations in approximately 120 to 150 days from the issuance of a building permit[60] - The company has identified potential new restaurant locations in the southeast U.S. market, with a focus on urban and suburban areas with median household incomes over $70,000[59] Operational Efficiency - The company plans to enhance operational capabilities while managing costs, focusing on sales, labor, and operating expense controls[56] - The company utilizes specialized software for sales forecasting at new restaurant sites, continuously updating data even during reduced growth periods[59] - The company employs a team of three to four managers at Bad Daddy's locations, with a bonus pool based on sales and operational objectives[81] - The company utilizes a cloud-based back-office solution that collects sales, labor, and cash data in near real-time, interfacing with financial accounting systems[93] Marketing and Customer Engagement - The marketing strategy for Bad Daddy's emphasizes local store marketing and digital media, avoiding large media buys[77] - The company aims to grow the Bad Daddy's brand through targeted advertising and menu engineering to increase customer visits and average check size[56] - Good Times maintains an average per person check of approximately $10.50, which is higher than typical quick-service restaurants[42] Franchise and Employment - Bad Daddy's currently has one franchise agreement in South Carolina and six Good Times franchise agreements in the greater Denver metropolitan area[90] - The estimated cost for a Bad Daddy's Burger Bar franchisee to open a restaurant ranges from $590,000 to $1,382,000[88] - Franchisees for Bad Daddy's typically pay a royalty of 4% to 5% of net sales and contribute up to 2% of net sales to an advertising fund[88] - As of September 28, 2021, the company employed approximately 2,230 individuals, including 2,011 hourly team members and 219 salaried managers[96] - The company has implemented an online screening tool that has successfully reduced hourly employee turnover[87] Product Quality and Competitive Advantage - The company believes it has a competitive advantage in product quality compared to traditional quick-service hamburger chains[101] - Good Times has a competitive advantage in product quality compared to traditional quick-service hamburger chains[101] - The company maintains a commitment to high-quality, all-natural ingredients in its menu offerings, differentiating itself in the quick-service restaurant segment[74] Financial Facilities and Compliance - The Cadence Credit Facility allows for loans up to $8,000,000 with a maturity date of January 31, 2023[25] - As of September 28, 2021, the company was in compliance with all financial covenants under the Cadence Credit Facility[27]