Good Times Restaurants Inc. Leases Disclosure
| 6. | Leases |
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 at various dates 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. For the fiscal year ended September 30, 2025, the Company incurred $29,000 of contingent rent expense. The Company incurred $54,000 of contingent rent expense for the fiscal year ended September 24, 2024.
The Company determines if a contract contains a lease at inception. The Company's material long-term operating lease agreements are for the land and buildings for our restaurants as well as our corporate office. The initial lease terms for our restaurants range from 10 years to 20 years, most of which at lease inception included renewal options of 10 to 15 years. The lease term is generally the minimum of the noncancelable period or the lease term including renewal options which are reasonably certain of being exercised up to a term of approximately 20 years.
Some of the leases provide for base rent, plus additional rent based on gross sales, as defined in each lease agreement. The Company is also generally obligated to pay certain real estate taxes, insurance and common area maintenance charges, and various other expenses related to properties, which are expensed as incurred.
Components of operating lease costs in the consolidated statements of operations for the fiscal years ended September 30, 2025 and September 24, 2024 are as follows (in thousands):
| Classification | Fiscal 2025 | Fiscal 2024 | ||||||||
| Operating lease cost | Occupancy, Other restaurant operating costs, preopening costs and General and administrative expenses, net | $ | 7,531 | $ | 7,450 | |||||
| Variable lease cost | Occupancy | 29 | 54 | |||||||
| Sublease income | Occupancy | (495 | ) | (517 | ) | |||||
| Total lease expense | $ | 7,065 | $ | 6,987 | ||||||
Supplemental cash flow disclosures for the fiscal years ended September 30, 2025 and September 24, 2024 (in thousands):
| Fiscal 2025 | Fiscal 2024 | |||||||
| Cash paid for operating lease liabilities | $ | 8,349 | $ | 8,072 | ||||
| Non-cash operating lease assets obtained in exchange for operating lease liabilities | $ | 1,465 | $ | 242 | ||||
Weighted average lease term and discount rate are as follows:
| September 30, 2025 | September 24, 2024 | |||||||
| Weighted average remaining lease term (in years) | 6.67 | 7.36 | ||||||
| Weighted average discount rate | 5.4 | % | 5.2 | % | ||||
Future minimum rent payments for our operating leases for each of the next five years as of September 30, 2025 are as follows (in thousands):
| Fiscal year ending September: | Total | ||||
| 2026 | $ | 8,208 | |||
| 2027 | 7,999 | ||||
| 2028 | 7,240 | ||||
| 2029 | 6,148 | ||||
| 2030 | 5,269 | ||||
| Thereafter | 12,346 | ||||
| Total minimum lease payments | 47,210 | ||||
| Less: imputed interest | (7,718 | ) | |||
| Present value of lease liabilities | $ | 39,492 | |||
The above future minimum rental amounts exclude the amortization of deferred lease incentives, renewal options that are not reasonably assured of renewal, and contingent rent. The Company generally has escalating rents over the term of the leases and records rent expense on a straight-line basis.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 29, 2025 | Showing above |
| 2024 | Dec 12, 2024 | |
| 2023 | Dec 14, 2023 | |
| 2022 | Dec 15, 2022 | |
| 2021 | Dec 16, 2021 | |
| 2020 | Dec 18, 2020 | |
| 2019 | Dec 20, 2019 | |
| 2018 | Dec 14, 2018 | |
| 2017 | Dec 22, 2017 | |
| 2016 | Dec 27, 2016 | |
| 2015 | Dec 29, 2015 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.