Good Times Announces Acquisition of New Growth Concept Development Rights &
Franchisor Ownership Interest
GOLDEN, Colo. -- April 15, 2013
Good Times Restaurants Inc. (Nasdaq: GTIM) today announced that it has entered
into a series of agreements with Bad Daddy’s International LLC and Bad Daddy’s
Franchise Development LLC for the exclusive development rights for Bad Daddy’s
Burger Bar restaurants in Colorado, additional development rights for Arizona
and Kansas, and the ownership of 48% of the franchisor entity, Bad Daddy’s
Franchise Development LLC.
The Company said that it will develop and operate new Bad Daddy’s Burger Bar
restaurants through a wholly owned subsidiary under a license agreement with
Bad Daddy’s Franchise Development LLC with its first restaurants planned in
Denver, Colorado in 2013. Good Times will own 48% of the franchisor and will
provide the franchisor with management services to it under a separate
Management Services Agreement.
Bad Daddy’s Burger Bar is a full service, upscale, “small box” restaurant
concept operating mostly in inline locations featuring a chef driven menu of
gourmet signature burgers, chopped salads, appetizers and sandwiches with a
full bar and a focus on a selection of craft microbrew beers in a high energy
atmosphere that appeals to a broad consumer base. Bad Daddy’s has received
both local and national accolades for the quality and originality of its food
and was most recently named a top 25 burger in the U.S. by USA Today. There
are four restaurants open and a fifth in the Charlotte airport operated by HMS
Host with three additional restaurants in development.
Commenting on the significance of the transaction, David Dobbin, Chairman of
Good Times said, “We have spent the last year looking for the right
acquisition and growth opportunity and have reviewed over two dozen concepts
that can help transform Good Times into a robust growth company. Our criteria
was threefold: 1) A differentiated concept that has wide consumer appeal
exhibiting high customer loyalty, 2) Industry leading unit economics and 3)
Experienced management that wants to participate in accelerated growth. Bad
Daddy’s has each of those and more and we couldn’t be more excited to partner
with them to build restaurants for our own account and to own a significant
portion of the franchisor as we ramp up franchised growth and development.”
The Company said that the agreements include provisions for the first right of
purchase of Bad Daddy’s International and its 52% of Bad Daddy’s Franchise
Development in the event of a proposed transfer by Bad Daddy’s entities and
other terms that align the interests of Good Times and Bad Daddy’s
International. Dobbin added, “This gives us the opportunity to deploy Good
Times’ existing and new capital into a very high return concept while owning a
significant portion of the franchisor in what we believe is a concept with
national expansion potential. Bad Daddy’s is generating extraordinary sales
out of a relatively small facility. Both sides were willing to be creative in
getting to a structure that can significantly leverage our existing corporate
infrastructure, accelerate the proven platform Bad Daddy’s has in place and
that does not require us to take on the risk of purchasing an early stage
growth brand at a very large premium.”
Bad Daddy’s is owned and operated by Dennis Thompson and Frank Scibelli. Mr.
Thompson is the developer of multiple restaurant concepts having developed and
taken public or sold Lone Star Steakhouse, Bailey’s Sports Grille and
Firebird’s Wood Fired Grill. The Bad Daddy’s Burger Bar Concept was created by
Mr. Scibelli, who has also produced multiple award-winning restaurant concepts
including Mama Ricotta’s, Midwood Smokehouse and Paco’s Tacos & Tequila.
Gary Heller of Heathcote Capital LLC provided advisory services to the Company
in connection with the Bad Daddy’s transaction. Mr. Heller is a member of the
Company’s board of directors.
Good Times is a regional chain of quick service restaurants located primarily
in Colorado providing a menu of high quality all natural hamburgers, 100% all
natural tenderloin sandwiches, fresh frozen custard, fresh cut fries, fresh
lemonades and other unique offerings. Good Times currently operates and
franchises 39 restaurants.
This press release contains forward looking statements within the meaning of
federal securities laws. The words “intend,” “may,” “believe,” “will,”
“should,” “anticipate,” “expect,” “seek” and similar expressions are intended
to identify forward looking statements. These statements involve known and
unknown risks, which may cause Good Times’ actual results to differ materially
from results expressed or implied by the forward looking statements. These
risks include such factors as the uncertain nature of current restaurant
development plans and the ability to implement those plans, delays in
developing and opening new restaurants because of weather, local permitting or
other reasons, increased competition, cost increases or shortages in raw food
products, and other matters discussed under the “Risk Factors” section of Good
Times’ Annual Report on Form 10-K for the fiscal year ended September 30, 2012
filed with the SEC. Although Good Times may from time to time voluntarily
update its forward looking statements, it disclaims any commitment to do so
except as required by securities laws.
Good Times Restaurants Inc.
Boyd E. Hoback, 303-384-1411
President and CEO
Christi Pennington, 303-384-1440
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