Good Times Restaurants Inc. Segments Disclosure

10.

Segment Reporting

 

Our chief operating decision maker (“CODM”) is the President and Chief Executive Officer. The CODM assesses performance, makes key decisions, and allocates resources at the concept level and has identified Good Times and Bad Daddy's as our separate operating and reportable segments. The Good Times segment includes the results of our Company-owned Good Times Burgers & Frozen Custard restaurants, which are located in the United States and operate within the quick-service restaurant segment of the industry. It also includes royalties and other fees from our franchised locations in the United States. The Bad Daddy’s segment includes the results of our Company-owned Bad Daddy’s Burger Bar restaurants, which are located in the United States and operate within the full-service dining restaurant segment of the industry. It also includes license fees from one licensed location in the United States. Unallocated costs such as human resources, finance, purchasing, restaurant development and administration are recorded at the Corporate level and are included in Other. The amounts reported for each operating segment contain allocations from Corporate for items such as technology support, repair and maintenance, marketing and restaurant accounting. In addition, Corporate collects rent from the Good Times segment related to one restaurant for which the real estate is included in Corporate assets. There are no material transactions between the Good Times and Bad Daddy’s segments.

Restaurant sales for each operating segment include revenues generated by the operation of Company-owned restaurants, which include food and beverage sales, net of discounts. Franchise and other revenues for each operating segment include franchisee royalties and contributions to advertising funds, license fees, and other service fees, as well as gift card breakage.

 

Our CODM uses Restaurant-level operating profit as the measure for assessing performance and allocating resources for our segments. Restaurant-level operating profit is widely regarded in the restaurant industry as a useful metric by which to evaluate restaurant-level operating efficiency and performance. The Company defines restaurant-level operating profit to be restaurant revenues minus restaurant-level operating costs, excluding restaurant closures and impairment costs. The measure includes restaurant-level occupancy costs, which include fixed rents, percentage rents, common area maintenance charges, real estate and personal property taxes, general liability insurance and other property costs, but excludes depreciation.

 

We do not rely on any major customers as a source of sales, and the customers and long-lived assets of our operating segments are located in the United States.

 

Prior to fourth quarter 2025, certain general and administrative expenses now included in Other were combined and reported with our Bad Daddy's segment. In order to better align with our internal reporting and provide a better representation of restaurant-level operating profit, these expenses have been removed from the Bad Daddy's segment and are now stated separately in Other. Fiscal 2024 figures have been recast for comparability.

 

The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP (in thousands):

 

		Fiscal Year Ended September 30, 2025
		Good Times				Bad Daddy's				Other				Consolidated
Restaurant sales		$	39,229			$	101,385			$	-			$	140,614
Restaurant operating costs:
Food and packaging costs			12,367				31,520				-				43,887
Payroll and other employee benefit costs			13,952				35,325				-				49,277
Restaurant occupancy costs			3,655				6,658				(83	)			10,230
Other restaurant operating costs			5,730				15,373				(366	)			20,737
Restaurant-level operating profit		$	3,525			$	12,509			$	449			$	16,483
Reconciliation of Restaurant-level operating profit to Net income before income taxes
Add:
Franchise and other revenues															1,016
Less:
Restaurant depreciation and amortization															3,954
Advertising costs															3,315
General and administrative															9,734
Impairment of long-lived assets and ROU assets															627
Gain on lease terminations and asset disposals															(469	)
Preopening costs															8
Income from operations															330
Less:
Interest and other expense, net															196
Add:
Other income															140
Net income before income taxes														$	274
Reconciliation of revenue
Restaurant sales		$	39,229			$	101,385			$	-			$	140,614
Franchise and other revenues			191				825				-				1,016
Total consolidated net revenues		$	39,420			$	102,210			$	-			$	141,630
Other segment disclosures
Restaurant depreciation and amortization		$	964			$	2,950			$	40			$	3,954
Impairment of long-lived assets and ROU assets		$	161			$	466			$	-			$	627
Capital expenditures		$	2,350			$	968			$	147			$	3,465
Property and equipment, net		$	7,577			$	14,048			$	243			$	21,868
Right-of-use assets, net		$	12,078			$	20,515			$	1,025			$	33,618
Total assets		$	20,859			$	47,508			$	15,440			$	83,807

		Fiscal Year Ended September 24, 2024
		Good Times				Bad Daddy's				Other				Consolidated
Restaurant sales		$	38,016			$	103,539			$	-			$	141,555
Restaurant operating costs:
Food and packaging costs			11,549				32,155				-				43,704
Payroll and other employee benefit costs			12,858				35,831				-				48,689
Restaurant occupancy costs			3,411				6,796				(120	)			10,087
Other restaurant operating costs			4,992				15,364				(68	)			20,288
Restaurant-level operating profit		$	5,206			$	13,393			$	188			$	18,787
Reconciliation of Restaurant-level operating profit to Net income before income taxes
Add:
Franchise and other revenues															825
Less:
Restaurant depreciation and amortization															3,755
Advertising costs															3,528
General and administrative															10,581
Impairment of long-lived assets and ROU assets															698
Loss on restaurant and equipment asset disposals															2
Litigation contingencies															(332	)
Income from operations															1,380
Less:
Interest and other expense, net															125
Net income before income taxes														$	1,255
Reconciliation of revenue
Restaurant sales		$	38,016			$	103,539			$	-			$	141,555
Franchise and other revenues			455				367				3				825
Total consolidated net revenues		$	38,471			$	103,906			$	3			$	142,380
Other segment disclosures
Restaurant depreciation and amortization		$	793			$	2,921			$	41			$	3,755
Impairment of long-lived assets and ROU assets		$	9			$	689			$	-			$	698
Capital expenditures		$	2,264			$	1,445			$	(8	)		$	3,701
Property and equipment, net		$	5,379			$	17,157			$	261			$	22,797
Right-of-use assets, net		$	11,850			$	22,646			$	1,175			$	35,671
Total assets		$	24,499			$	53,662			$	8,957			$	87,118